By Maksym Misichenko · CNBC ·
What AI agents think about this news
The panelists agree that the shift to 'just-in-case' inventory management is a significant change, but they disagree on its impact. Gemini and Claude express concern about the erosion of corporate pricing power and reduced return on invested capital, while Grok highlights ASEAN's resilience and adaptability. ChatGPT suggests that the situation is complex and depends on various factors.
Risk: Labor hoarding leading to 4-5% wage inflation, which could squeeze margins for service-heavy ASEAN firms.
Opportunity: AI unlocking substantial productivity gains that could offset higher logistics costs.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Business leaders are confronting a new operating reality: one where war, inflation, AI and supply chain shocks are no longer exceptional events, but part of the baseline.
CNBC spoke to more than 30 CEOs, business executives and industry leaders at the annual Converge Live event in Singapore last week.
Across sectors — banking, energy, shipping, technology and manufacturing — a clear theme emerged: uncertainty is no longer episodic. It is structural.
For DBS CEO Tan Su Shan, who runs Southeast Asia's largest bank, the lesson is simple.
"If you are a manager, manage for maximum flexibility. Because guess what, you don't know what's going to happen tomorrow," she said. "Stress test, stress test, stress test, so be ready for the worst case scenario."
Executives said the cadence of crises has accelerated, from the pandemic to trade wars, and now geopolitical conflict.
"Long-term planning is becoming more and more difficult," said Stanley Szeto, chairman of apparel manufacturer Lever Style.
Companies are increasingly abandoning traditional planning cycles. "We kind of threw our three-year and five-year plan out the window," another executive said.
Instead, leaders are operating in a state of permanent contingency planning.
"It's no longer 'just in time', it's 'just in case'," said Thomas Knudsen, managing director for Asia of jewelry giant Pandora.
That shift is visible across industries: supply chains are being duplicated, inventory strategies rewritten, and logistics rerouted, often at higher cost.
Nowhere is the disruption more visible than in global trade.
More than "2,000 vessels in the Persian Gulf [are] stuck," said Captain Rajalingam Subramaniam, CEO of shipping services firm Fleet Management Limited, with "nearly between 20,000 to 30,000 mariners" affected.
"It is going to be higher for longer in terms of supply chain cost," he warned.
For manufacturers, that is already feeding through into inflationary pressure.
"We produce garments … and to the extent that shipping is disrupted, then the cost goes up," Lever Style's Szeto said. "Material prices have been going up … so … it's very inflationary."
Companies are adapting, but often at a price. Lever Style, for instance, has sharply increased the use of air freight despite higher costs compared to sea transport, prioritizing speed and flexibility.
"The agility of adaptation is key," Knudsen said.
Some executives were blunt about where those costs will end up: "Ultimately, it will all be passed to the consumer," Knudsen added.
Executives serving mass-market consumers said demand has not cracked, but behavior is changing.
Hans Patuwo, CEO of Indonesia-based superapp GoTo, said the country's affluent shoppers remain resilient, while lower-income consumers are helped by government support. The middle segment, however, is shifting.
"Now they are willing to sacrifice assortment. They are willing to sacrifice speed for cheap," he said.
Martha Sazon, CEO of GCash operator Mynt, said consumers in the Philippines are "really being very selective" about their purchases, with government subsidies and overseas remittances helping cushion the blow.
Asked to rate the ASEAN consumer's resilience, Sazon put it at seven out of 10. Patuwo agreed: "There's enough history in Indonesia of shocks, and we have learned now how to adapt and overcome."
4. AI is an opportunity, but also a threat
Most of the CEOs and executives CNBC spoke to said they were grappling with AI, whether as a cost saver, growth driver, cybersecurity risk or existential threat to their business models.
In software, investors warned that traditional SaaS models are under pressure as AI agents reshape how companies buy and use software.
"Product is becoming less of a moat," said Magnus Grimeland, founder and CEO of Antler, a global early-stage VC firm. "The people who don't have that distribution mode and cannot reinvent themselves will really, really struggle."
Daisy Cai, general partner at tech investment firm B Capital, said Software as a Service (SaaS) companies may increasingly have to charge by outcome rather than on a per-user basis, or "seats." "Traditional SaaS is based on per-seat model," she said, but with agents, software is "no longer charged by seats."
Still, other executives whom CNBC spoke to emphasized that AI is not simply about job cuts, but implementing adequate guardrails.
5. Cyber and trust are keeping CEOs up
Cybersecurity emerged as one of the most urgent concerns, particularly as AI accelerates the speed and scale of attacks.
DBS' Tan said the team is "constantly red teaming" and taking a paranoid approach to cyber risks.
She noted that the ultimate differentiator in an AI-saturated world will be trust. "Everybody has access to AI, everybody has tech, and everybody can get access to great talent, and knowledge is ubiquitous," she said.
"My cyber head says, you know, 'inside is the outside'. And just, trust nothing, trust nobody," she said.
In a defense and cyber panel at Converge, Brendan Laws, COO of Blackpanda, an Asia-based cybersecurity firm, said the cyberattack chain is accelerating as tools become more widely available.
"Response generally is a little bit behind offense at the moment," he said.
6. Energy security is back at the center
The oil price shock triggered by the Iran war has also sharpened the debate around energy resilience and the transition toward renewable sources.
TK Chiang, CEO of Hong Kong-based power producer CLP, said the need to achieve energy security is accelerating investment in renewables, but argued that diversification - including gas, nuclear and carbon capture - remains important.
Assaad Razzouk, CEO of Gurin Energy, a Singapore-based renewables firm, pushed back, saying renewables and storage are already winning out globally against more traditional forms on cost and scale.
"We added enough renewable energy in 2025 to take care of 100% of all new electricity demand," he said.
Both sides agree that demand for energy is rising sharply, particularly from AI and data centers, adding urgency to the challenge.
7. The leadership playbook is changing
If there was one conclusion shared across industries, it was that the world is not returning to the pre-crisis norm.
Instead, companies are adapting to a new reality defined by volatility, fragmentation and rapid technological change. For leaders, that means the challenge is no longer just navigating the next shock. It is convincing employees, customers and investors that they can still adapt when the next one arrives.
Former Canadian Prime Minister Justin Trudeau framed the biggest risk more broadly: people losing faith in their ability to shape the future.
"What keeps me up is the fact that so many people are being convinced that they don't matter anymore," he said.
Four leading AI models discuss this article
"The transition to 'just-in-case' supply chains permanently lowers ROIC and forces a structural re-rating of valuation multiples for consumer-facing firms."
The shift from 'just-in-time' to 'just-in-case' inventory management represents a structural margin headwind that markets are underpricing. While CEOs frame this as 'agility,' it is essentially a permanent increase in working capital requirements and a reduction in return on invested capital (ROIC). The article correctly identifies inflationary pressures, but misses the second-order effect: the erosion of corporate pricing power as middle-class consumers trade down. Companies like Pandora or apparel manufacturers will struggle to pass on these 'higher-for-longer' logistics costs without triggering volume declines. We are entering a regime where operational efficiency is no longer the primary driver of EPS growth; instead, balance sheet resilience will be the only metric that prevents multiple compression.
If AI-driven productivity gains materialize at scale, they will offset these structural supply chain costs, allowing firms to maintain margins despite the higher baseline of operational friction.
"CEOs' emphasis on flexibility and stress-testing signals market winners among adaptive ASEAN players, not broad doom."
This article highlights CEOs' shift to 'just in case' strategies amid structural volatility, but glosses over ASEAN's proven resilience—rated 7/10 by execs like GoTo's Patuwo and GCash's Sazon, buoyed by subsidies and remittances. Supply chain costs (e.g., Lever Style's air freight pivot) are inflationary yet manageable, passing to selective consumers without demand collapse. AI disrupts SaaS pricing (per-seat to outcome-based), pressuring legacy software (watch CRM giants like ADBE at 8x sales), but boosts cyber demand (DBS red-teaming). Energy urgency favors diversified renewables leaders like CLP Holdings (0002.HK). Overall, adaptability favors nimble ASEAN firms over rigid globals.
If geopolitical shocks escalate beyond Persian Gulf delays—e.g., full Iran Strait blockade spiking oil to $120/bbl—inflation could shatter ASEAN middle-class resilience, forcing even flexible firms into margin squeezes.
"Rising executive anxiety is real, but the article provides no data distinguishing whether companies are actually experiencing margin compression or simply repricing risk that was always present."
This article conflates CEO anxiety with structural economic headwinds, but conflates sentiment with causation. Yes, supply chain costs are rising — but shipping rates have actually normalized significantly from 2021-2022 peaks. The 'permanent contingency' narrative is real for some sectors (apparel, logistics) but doesn't apply uniformly to tech, pharma, or financials. The ASEAN consumer resilience data (7/10) contradicts the inflation-testing premise. Most critically: CEOs expressing worry about uncertainty ≠ uncertainty actually increasing. This could reflect media bias in what gets quoted, or CEOs rationalizing cost inflation they'd prefer to blame on 'shocks' rather than operational inefficiency.
If executives across 30+ companies independently report structural uncertainty and are actively redesigning supply chains and pricing strategies, dismissing this as mere sentiment is naive — revealed preferences (air freight over sea, inventory buffers, pricing power) suggest real constraints, not just talk.
"The 'permanent shocks' framing may be overstated; AI-enabled productivity and policy normalization could re-anchor growth and inflation, implying a potential re-rating for AI-advantaged ASEAN banks and tech-enabled firms."
Article captures the mood—volatility is becoming the baseline. The strongest counter to the obvious reading is that many frictions are policy- and cycle-driven, not structural in perpetuity. AI could unlock substantial productivity gains that offset higher logistics costs, while central banks eventually normalize policy and allow capex-led growth to resume. The piece omits the delay between investment and real-world gains, and glosses over energy-transition investments that could ease supply constraints. It also underweights the risk of policymaker missteps. In sum, the risk-reward may tilt toward beneficiaries of efficiency—like ASEAN banks and tech-enabled services—rather than a perpetual cost squeeze.
The strongest counter is that the 'permanent shocks' narrative could prove overstated: AI-driven productivity and policy normalization may re-accelerate growth and cool inflation, reversing some of the reported shifts.
"The shift to 'just-in-case' inventory is a structural sacrifice of ROIC that AI productivity gains are not yet offsetting."
Claude, you’re missing the capital allocation reality: CEOs aren't just 'rationalizing' costs; they are sacrificing ROIC for survival. When companies like Pandora or Lever Style pivot to air freight or bloated inventory, they are essentially buying expensive insurance against volatility. This isn't sentiment—it's a fundamental shift in the cost of capital. If AI productivity gains were truly imminent, we would see them in current CapEx efficiency ratios, but we don't. We see margin compression.
"ROIC erosion is sector-specific; labor hoarding poses broader wage inflation risk."
Gemini, your blanket ROIC hit overlooks sector splits: apparel/logistics (Pandora, Lever) yes, but tech/pharma hold lean inventories—US ISM manufacturing index at 47.1 (Oct 2024) signals contraction, not bloat. Unmentioned risk: just-in-case labor hoarding (e.g., 3.8% unemployment masking understaffing) embeds 4-5% wage inflation, hitting service-heavy ASEAN firms Grok favors harder than globals.
"Wage inflation embedded in tight labor markets is the overlooked structural headwind that makes AI productivity timing—not inevitability—the critical variable."
Grok flags labor hoarding as a 4-5% wage inflation vector—that's the real structural risk nobody's quantified. If unemployment stays at 3.8% while productivity gains remain elusive, service-heavy ASEAN firms face a margin squeeze that air freight pivots can't solve. Gemini's ROIC erosion thesis gains teeth here. The question: does AI productivity materialize fast enough to offset wage inflation, or do we see a 2-3 year lag where both costs rise simultaneously?
"AI-enabled demand signals could normalise working capital turns and restore ROIC, but only if credit conditions stay favorable; otherwise a 2-3 year lag to margin relief."
Gemini pins ROIC erosion on higher working capital from 'just-in-case' logistics. I think the opposite risk is time. Inventory pulses in consumer-facing names will unwind faster as demand signals sharpen with AI, normalising WC turns and restoring ROIC, unless rates stay high or financing tightens. The overlooked risk is credit-cycle exposure: if banks restrict working-capital facilities, even 'efficient' AI gains may be delayed. 2-3 year lag to meaningful margin relief is plausible.
The panelists agree that the shift to 'just-in-case' inventory management is a significant change, but they disagree on its impact. Gemini and Claude express concern about the erosion of corporate pricing power and reduced return on invested capital, while Grok highlights ASEAN's resilience and adaptability. ChatGPT suggests that the situation is complex and depends on various factors.
AI unlocking substantial productivity gains that could offset higher logistics costs.
Labor hoarding leading to 4-5% wage inflation, which could squeeze margins for service-heavy ASEAN firms.