DBS flags tighter financing as markets reprice AI investment risk

DBS expects investors and lenders to demand stricter terms and higher returns for artificial intelligence-related borrowing as markets reassess the risks tied to heavy AI capital spending. Chief Executive Officer Tan Su Shan said the shift should bring more discipline to financing structures and test whether big spending across the AI ecosystem can generate returns strong enough to repay debt and reward equity and bond holders. She said weaker companies could face credit-rating downgrades as scrutiny rises. Southeast Asia’s biggest bank has originated about S$25 billion, or roughly US$20 billion, of AI deals in 2026, often leading syndicated loans while keeping only a small share on its own books. The funding has gone mostly to hardware, including semiconductors, memory chips and data centers.