Singapore Regulator Warns of Stretched AI Valuations, Echoes Dot-Com Bubble Fears

The Monetary Authority of Singapore (MAS) issued a stark warning in its annual Financial Stability Review released on November 5, 2025, highlighting that equity markets are seeing "relatively stretched valuations" concentrated in the technology and artificial intelligence sectors. The regulator emphasized that much of the recent global equity market gains have been driven by AI-linked investments, leaving investors heavily exposed to potential downturns.

MAS specifically pointed to opaque financing structures used by some large tech firms, such as special purpose vehicles and private credit arrangements, which could mask leverage and increase funding dependencies. The report noted that a retrenchment of optimism in AI's ability to generate sufficient future returns may lead to sharp corrections in broader equity markets and further defaults in the private credit market.

Valuations for key AI companies have soared, with OpenAI reaching a $500 billion valuation and targeting $1 trillion ahead of a possible 2026 IPO, while Anthropic nearly tripled its value from $60 billion to $170 billion since March. Analysts, including Jordi Alexander, CEO of Selini Capital, compared the situation to the late-1990s dot-com bubble, citing that productivity gains from AI are still distant, raising concerns of a temporary bubble.

Nirav Murthy, co-founder of Camp Network, agreed that valuations have outpaced fundamentals, warning that the next phase must be earned with real unit economics. The warning coincided with a global tech selloff, where the S&P 500 fell 1.2%, the Nasdaq Composite dropped 2%, and European indices like the Stoxx 600 Technology Index declined 1.2%. MAS also flagged broader risks, including rising sovereign debt and credit market vulnerabilities, which could exacerbate market instability.