Fitch Ratings said institutional investors across Asia are increasingly focused on risks related to artificial intelligence, private credit and sovereign credit, according to a Tuesday press release.

The ratings agency said investors are closely monitoring rising spending on AI infrastructure, execution risks and pricing pressure.

It warned that rapid adoption of artificial intelligence could displace workers and erode tax bases, particularly in developed markets.

Fitch said investors also remain concerned about intensifying competition and limited transparency in private credit, particularly in the U.S. middle-market lending sector.

However, it does not expect the asset class to pose a systemic risk on its own.

On sovereigns, Fitch said investors are assessing Indonesia's policy credibility, fiscal transparency and the role of its new sovereign wealth fund, Danantara, while continuing to view Japan and South Korea as relatively resilient despite longer-term fiscal and structural challenges.

The agency added that geopolitical tensions in the Gulf continue to pose downside risks, although the direct credit impact has so far been modest.