Southeast Asia plus 3 namely South Korea, Japan and China are most exposed should the current AI boom slows down, according to a research paper. This is because the region is at the center of the global AI supply chains accounting for two thirds of global growth in AI-related trade. It is also increasingly integrated into AI- related financial markets, the Asean+3 Macroeconomic Research Office said in its 2026 Financial Stability Report published yesterday.
Some of the consequences could include stock market selloffs, capital outflows, refinancing pressure on highly indebted technology and infrastructure firms, and reduced technology exports, the paper added.
Countries like South Korea hosts some of the biggest firms supplying the bulk of memory chips to the world while Malaysia is one of the top semiconductor assembly hubs globally.
Increasing borrowings by hyperscalers to fund costly data center buildouts, opaque private credit markets and circular financing deals could make the situation worse. A potential correction could also spill over to the broader financial system through forced deleveraging and tighter credit conditions, noted a research house.
Central bankers around the world, from the Bank of England to the Monetary Authority of Singapore, as well as many academics and commentators have increasingly voiced concerns over whether massive investments in AI are justified compared to its meager returns.