Global companies are investing USD 2 trillion in AI... To turn a profit, they will need USD 4 trillion in revenue

“Leading global companies are investing massive amounts of capital to dominate the AI market. But will that be the end of it? At some point, they will need to recoup those investments.”

Uday Sareen, chief executive and head of Wholesale Banking APAC at ING, shared this outlook on the future of the AI boom. Wholesale Banking, the division he oversees, provides large-scale financing services to corporations, institutions and governments. ING provides wholesale banking services across 11 markets in Asia Pacific. In Korea, it established ING Bank 35 years ago and ING Securities 10 years ago, and currently works with around 500 major conglomerates and foreign companies.

According to ING estimates, annual capital expenditure (CAPEX) related to AI infrastructure, such as data centres and power facilities, amounts to between USD 600 billion and USD 700 billion globally, equivalent to approximately KRW 900 trillion to KRW 1,000 trillion. The resulting demand for trade payment intermediation, foreign exchange hedging and other banking services is also significant. We met with Sareen and Helen Jung, Country Manager of ING Korea, to discuss global AI industry trends and the outlook for the Korean economy.

Uday: “This is truly a once-in-a-generation shift in the capital paradigm. It is not simply about blindly chasing a new technology called AI. In the real world, there are already numerous examples of companies using AI to improve productivity. As expectations around AI commercialisation continue to grow, investment is surging in areas such as data centre construction and semiconductor procurement. Within ING, we also see infrastructure investment, including data centres, and AI-related project finance as promising sectors.”

Helen: “Some people are concerned about an AI bubble, similar to the dot-com bubble. However, the dot-com era and today’s environment are fundamentally different. The dot-com boom was largely limited to online networks. AI, by contrast, is driving transformation across all industries. In Korea, investment is increasing not only in semiconductors but also across the broader infrastructure ecosystem, including data centres, power facilities and cooling systems. ING also arranged a KRW 440 billion green loan for the development of a 100MW environmentally friendly data centre in Seoul together with data centre platform company Digital Edge.”

Uday: “During an investment boom such as the one we are seeing now, few people talk about returns. Yet every investment ultimately requires a return. The time will come when companies that have raised enormous amounts of capital to build AI infrastructure must demonstrate that they can generate returns that exceed their investment. Over the past two and a half years, around USD 2 trillion has been invested in building the AI ecosystem, including data centres, semiconductors and cloud infrastructure. Going forward, if companies are to break even while maintaining margins of 35–40%, they will need to generate more than USD 4 trillion in revenue. In other words, a vast and commercially viable AI economy must emerge.”

Uday: “The global private credit market currently stands at around USD 1.5 trillion to USD 2 trillion. That represents only around 5–6% of global bank credit. Even if defaults occur within the private credit market, I believe the likelihood of them triggering a broader financial crisis is relatively low. However, if certain banks are overly exposed to private credit assets, there is a possibility that defaults could spill over into the banking sector.”

Uday: “Until the end of last year, the key question was when the US Federal Reserve would begin reducing interest rates. Now, expectations have shifted towards the possibility of further rate increases. A key driver is the conflict in the Middle East. Disruptions to energy supply chains are fuelling inflationary pressures. US headline inflation has risen to 4%. This is a classic example of cost-push inflation. As raw material costs rise, businesses face increasing pressure on production costs and supply. As constrained supply drives up consumer prices, the impact spreads across the wider economy. We are now at a stage where energy-led inflation is placing growing pressure on corporate earnings.”

Helen: “We expect the Bank of Korea to raise its benchmark interest rate twice this year and once again next year. Korea is particularly dependent on energy imports, which means the effects of cost-push inflation are likely to be more pronounced. As a result, the central bank may be less hesitant to tighten monetary policy. However, exports remain strong, led by semiconductors, and economic growth should remain resilient. ING forecasts Korea’s economic growth rate at 4% this year.”

Uday: “In our recent discussions with major clients, the topic that arises most frequently is liquidity management. With the conflict in the Middle East and rising interest rates, it has become increasingly important to prepare for potential disruptions to raw material supply chains and funding flows. Companies are reassessing their capital expenditure plans and seeking to preserve as much cash as possible. Foreign exchange hedging is also a key priority. The conflict has strengthened the US dollar, which remains a traditional safe-haven asset. As a result, companies are increasingly seeking to raise funds in their home currencies or in the local currencies of their business partners.”

Uday: “In theory, a higher exchange rate should benefit exporters because they receive more won when export proceeds denominated in US dollars are converted into local currency. However, the current situation is more complicated. The cost of importing raw materials has increased significantly, creating challenges long before companies realise export revenues. One major Korean conglomerate client recently told us that while export performance had improved, rising import costs had made business management increasingly difficult. A weaker currency may not immediately trigger a crisis, but over the medium to long term it can become detrimental to the economy, particularly through rising energy import costs and sustained inflationary pressure.”

Helen: “Ultimately, companies need strategies to minimise exchange-rate-related risks, whether through localisation of production or by raising funds in the local currencies of their counterparties. In fact, over the past two to three years, an increasing number of Korean companies have sought to issue euro-denominated bonds. According to Bloomberg, the volume of euro-denominated bonds issued by Korean companies and arranged by ING reached EUR 510 million, or KRW 899.7 billion, in the first half of this year alone. That already represents 62% of last year’s full-year issuance volume of EUR 820 million and exceeds the annual total recorded in 2024, which totalled EUR 331.33 million.”

Originally published in Chosun Ilbo: Opens in a new tabhttps://www.chosun.com/economy/economy_general/2026/07/04/MY3TUNVMLBACXJT44ANOXWKCCA