Southeast Asia's largest bank is sounding the alarm on Wall Street's AI obsession. DBS CEO Tan Su Shan warned investors to "buckle up" for continued market volatility, pointing to the dangerous concentration of trillions of dollars in just seven tech giants. Her comments come as global financial leaders predict a 10-20% market correction within two years, with AI valuations reaching unsustainable levels.
The head of Southeast Asia's financial powerhouse just delivered a stark warning that's echoing across trading floors worldwide. DBS CEO Tan Su Shan told CNBC investors should "buckle up" for persistent market turbulence, with her sights set squarely on the dangerous concentration gripping Wall Street.
"We've seen a lot of volatility in the markets. It could be equities, it could be rates, it could be foreign exchange," Tan said, adding that she expects the wild swings to continue. The banking veteran, who took over from longtime CEO Piyush Gupta just eight months ago, isn't mincing words about what's driving the instability.
The culprit? What markets call the "Magnificent Seven" - Amazon, Google, Meta, Apple, Microsoft, Nvidia, and Tesla. These AI and tech darlings have captured trillions in market capitalization, creating a concentration risk that has global financial leaders on edge.
"You've got trillions of dollars tied up in seven stocks, for example," Tan explained during her CNBC interview. "So it's inevitable, with that kind of concentration, that there will be a worry about 'when will this bubble burst?'"
Her timing couldn't be more pointed. Just this week, Advanced Micro Devices and Palantir posted stronger-than-expected quarterly results yet saw their shares tumble alongside the broader Nasdaq. It's the kind of disconnect between fundamentals and market reaction that has seasoned bankers like Tan raising red flags.
The warning comes on the heels of similar alerts from heavyweight institutions. At the Global Financial Leaders' Investment Summit in Hong Kong, industry chiefs predicted a 10-20% market drawdown over the next 12 to 24 months. Morgan Stanley CEO Ted Pick called such pullbacks "healthy developments rather than signs of crisis" - a sentiment Tan echoed directly.