DBS CEO Tan Says Market Is Repricing Risks on AI Financing

The market is repricing the risks around investments related to the buildup of artificial intelligence that could lead to more discipline in financing, according to DBS Group Holdings Ltd. Chief Executive Officer Tan Su Shan.

“The market has spoken,” Tan said in an interview with Bloomberg Television on Monday. “It’s not a bad thing because now, people are asking for higher returns, and people are also looking at structures. They’re making sure that whatever money is now being hoovered into the whole AI capex ecosystem will lead to some kind of long-term ROI that can then be repaid back to debt or bond or equity holders.”

Tan, who leads Southeast Asia’s biggest lender, said weaker firms may see their credit ratings revised downwards, though this risk repricing is “healthy” as the market wants to make sure that big financial commitments are sustainable.

DBS has originated about S$25 billion ($20 billion) of AI deals this year, often as lead manager on syndicated loans and has held only a fraction of that, Tan said. The financing is mostly for hardware, from semiconductors and memory chips to data centers, she added.

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