GIC chief investment officer warns of Al bubble investment risk

A “hype bubble” is building in early-stage AI venture investing, GIC’s chief investment officer said, joining a chorus of investors sounding alarms over the sector’s boom.

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“If the technology doesn’t catch up and doesn’t deliver as per the high expectations that the market’s pricing in, then we’re in for a bubble,” group CIO Bryan Yeo said at the Milken Institute Asia Summit in Singapore on Oct 3.

He also warned of a fiscal risk event, especially after governments around the world increased borrowing during the Covid-19 pandemic. “The question is whether the world can grow out of this large stock of debt,” he said, adding it is politically difficult for governments to go to their electorates to cut spending and raise taxes, which might lead to investors forcing the issue at one point with a rise in bond yields that will scare global markets and lead to loss of confidence in a country’s currency.

Mr Yeo took the GIC position in April when his predecessor Jeffrey Jaensubhakij stepped down after almost three decades at the Singapore sovereign wealth fund, one of the world’s largest.