Asia’s economic exposure to the artificial-intelligence boom is becoming a potential source of systemic vulnerability, with a sharp downturn in AI demand capable of hitting exports, investment and financial markets across some of the region’s largest economies.
The warning comes from the ASEAN+3 Macroeconomic Research Office (AMRO), which said Southeast Asia, China, Japan and South Korea are particularly exposed because they sit at the centre of global AI supply chains and are increasingly connected to AI-related financial markets.
The concern is not that an AI downturn is inevitable. Rather, AMRO is highlighting how deeply the region has become tied to the technology cycle at a time when investors are questioning whether the scale of current valuations, infrastructure spending and financing can be sustained.
Asia has benefited heavily from the rapid expansion of AI. Semiconductor manufacturing, memory chips, electronics and data-centre equipment have driven technology-related exports, while companies and governments have increased investment to capture a larger share of the emerging industry.
The ASEAN+3 region accounted for about two-thirds of the growth in global AI-related trade, according to AMRO. That strength has helped support economic activity, but it also means a sudden slowdown could have an unusually broad impact.
AMRO estimates that a slowdown in AI-related demand could reduce regional economic growth by as much as 1.5 percentage points in 2027. The organisation currently projects ASEAN+3 growth at 4.1 per cent in both 2026 and 2027, making weaker AI demand one of the most important downside risks to the outlook.
The transmission would extend well beyond technology exporters.
A decline in AI demand could weaken orders for chips and other high-value components, reducing export revenues and corporate investment. Markets could then face losses as investors reassess technology valuations, while capital could move away from economies and companies perceived to be overly dependent on the AI cycle.
AMRO warned that an “orderly” slowdown would be manageable, but a disorderly correction could spread through several channels, including lower technology exports, portfolio losses, capital outflows, refinancing pressure on highly leveraged technology and infrastructure companies, and weaker investor confidence.
Financial-market exposure is an additional concern. South Korea’s equity market, for example, has significant exposure to AI-related companies. Japan and Hong Kong have also become increasingly correlated with US technology and AI assets, creating the possibility that a shock originating outside Asia could be transmitted into regional markets without a domestic trigger.
The financing of the AI infrastructure buildout adds another layer of risk. Hyperscalers and other companies are committing enormous sums to data centres and computing capacity, with increasing reliance on borrowing. If expected returns fail to materialise, higher leverage could magnify losses and create pressure across credit markets.
AMRO also pointed to opaque private-credit structures and circular financing arrangements as factors that could make the eventual adjustment harder to assess and contain. A sharp fall in AI-related financial assets, it said, could spill into the wider financial system through forced deleveraging and tighter credit conditions.
At the same time, the region is not entering this period from a position of weakness. AMRO has kept its 2026 and 2027 growth forecasts at 4.1 per cent, supported in part by strong AI-related exports and investment. The organisation is therefore describing a two-sided exposure: AI is currently supporting growth, but the same dependence could become a vulnerability if demand or expected returns deteriorate sharply.
AMRO’s lead economist Runchana Pongsaparn said the organisation was monitoring indicators including company valuations, leverage, funding sources and underlying demand. Warning signals exist, she said, but they are not yet considered severe.
That distinction matters. The immediate issue is not whether the AI boom will collapse, but whether expectations surrounding it have moved faster than the underlying economics.
For Asia, the stakes are unusually high. The region has become one of the principal manufacturing and investment centres of the AI economy. If the boom continues, that position could deliver sustained gains in exports and productivity. If the cycle reverses abruptly, the same interconnected supply chains and financial markets could transmit the shock with equal speed.
The lesson for policymakers is therefore less about retreating from AI than about preparing for the possibility that its extraordinary expansion will eventually slow. The region’s challenge is to ensure that an AI-driven growth engine does not become an AI-driven concentration risk.
