Investors examine AI financing as regulators take different paths

A bank CEO says investors are examining AI financing more closely, while the EU says its AI Act can meet the risk from rogue agents.

By @0xNotMarc

Investors are looking harder at AI financing

DBS CEO Tan told Bloomberg Television on 12 October that investors are demanding higher returns and examining financing structures more closely, and she described the repricing as healthy. DBS has originated approximately S$25 billion in AI-related financing deals so far this year, according to Tan, and most of it supports hardware such as semiconductors, memory chips and data centres.

Weaker borrowers sit at the edge

Tan also warned that financially weaker companies could face credit rating downgrades as markets reassess their exposure to AI-related investments. For a lender, that is a reason to check which borrowers are most exposed to AI-related investments.

Europe keeps its rulebook

In Europe, EU tech chief Henna Virkkunen told Reuters that the guardrails of the AI Act are capable of meeting the risk posed by rogue AI agents. The European Commission sent requests for information in late August to more than 30 AI companies, and she is now assessing their responses.

Washington reportedly requires incident reports

The White House is reportedly requiring AI companies to report and correct security incidents, and the White House said the process "is not optional". Separately, The Decoder reports that the White House has reversed its decision to block the UK's AI Security Institute from accessing new AI models.

What to watch in your own role

Credit teams can watch how AI-related deals are structured, and risk teams can watch which incident reporting and safety testing rules apply to the AI vendors they use. Which of your own AI exposures would you want to explain first?