LIVE MARKETS-Surprise! AI sentiment turns sharply negative in Asia

By Reuters News

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SURPRISE! AI SENTIMENT TURNS SHARPLY NEGATIVE IN ASIA

Investor enthusiasm for artificial intelligence is cooling rapidly in Asia, it seems.

That's the key takeaway from BofA's marketing trip to Hong Kong and Singapore last week, where the bank's European capital goods team met around 50 clients.

According to analysts including Benjamin Heelan, discussions were notably more sceptical than expected, with investors increasingly focused on whether AI can generate meaningful returns rather than simply drive infrastructure spending.

The analysts said the conversation has shifted to a more fundamental question: whether AI can be monetised beyond coding applications over the next 12 months.

"The key concern was the AI TAM (total addressable market), with clients questioning whether current levels of data centre investment can be justified if broader AI use cases don’t materialise near term," they said. "We were surprised by the amount of negative sentiment."

Scepticism was most evident in power, with concerns growing that orders may be approaching a peak after years of exceptional growth extending into 2027-2028.

BofA said the debate showed "investors (are) nervous multiples will de-rate as order growth moderates, even if absolute demand is healthy."

(Danilo Masoni )

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