Temasek plans to nearly triple AI investments as portfolio hits record $401 billion

Temasek targets big jump in AI investments as value of portfolio hits record high

SINGAPORE, July 8 (Reuters) - Singapore state investor Temasek said on Wednesday it was targeting a major increase in its investments in AI companies, aiming to lift its exposure to the technology to as much as 15% over the next five years from 6% now. Temasek, which owns stakes in Anthropic and OpenAI, also said that its net portfolio ⁠value had climbed to S$518 billion ($400 billion) last financial year, marking the second consecutive year that it has hit a record. That represented growth of 10.5% in Singapore dollar terms or 14.8% in U.S. dollar terms. The return compares with a 17% rise for MSCI's world stocks gauge (.MIWO00000PUS), opens new tab, though Temasek's portfolio differs from public equity benchmarks in structure, mandate and asset mix. Chief Executive Dilhan Pillay told a briefing that the rapid advancement of AI represented "a pivotal phase ⁠that will create vast new opportunities. He added that Temasek intended to deploy capital across five focus areas: energy and data centres, semiconductors, cloud service providers, foundation models and AI applications and software infrastructure. Temasek would also be looking at its entire holdings ⁠through the lens of AI, he said. "The rubber hits the road in AI adoption," he said. "The remaining 85% of our portfolio must be focused on AI adoption for ⁠competitiveness. That is where the rest of our portfolio will see value capture." Temasek said its results last year were helped by gains from divestments and ⁠the performance of local companies. It declined to disclose its stakes in AI companies and how that might have affected its performance. Reporting by Yantoultra Ngui and Rae Wee; Editing by Tom Westbrook and Edwina Gibbs Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Asian Markets Yantoultra Ngui Thomson Reuters Yantoultra Ngui is the Southeast Asia Deals Correspondent of Reuters in Singapore, covering M&A and capital market activities in a region that is fast emerging as one of the world's biggest economies. He previously was a reporter at Bloomberg and The Wall Street Journal (WSJ). Notably, he was part of WSJ's team that covered the financial scandal at Malaysian state fund 1MDB, and that won SOPA Excellence in Breaking News award for the coverage of the assassination of Kim Jong Nam, the half-brother of North Korea's leader Kim Jong Un, in Malaysia in 2018. Yantoultra graduated with an MBA in Finance from Universiti Putra Malaysia (UPM) in 2010.

Singapore's Temasek doubles down on AI and private credit

Temasek has set out plans to nearly triple its exposure to AI companies and double its private credit holdings over the next five years, as Singapore's state investor focuses on accelerating returns after several lacklustre years. The investment group with S$518bn (US$401bn) under management notched up total shareholder returns of 10.5 per cent in the year to the end of March, down from 11.8 per cent the year before. Yet over five years, it has averaged annual returns of 4.6 per cent, compared with 13 per cent for the MSCI World global stocks benchmark, having been hit by a market downturn in China. In a bid to turbocharge growth, Temasek announced plans on Wednesday to increase its exposure to AI companies from 6 per cent of its total portfolio to 15 per cent by 2031. "AI is integral to how we sense emerging opportunities, adapt our portfolio and thrive as an institution," said Dilhan Pillay, Temasek's chief executive. The state investor said its AI investments would be focused on five areas: energy and data centres, semiconductors, cloud service providers, AI model developers such as OpenAI and Anthropic, and apps and software infrastructure. It added that new investments would be made primarily through buying public rather than private equities. As its AI investments increased, the share of other technology and telecommunications companies in the portfolio would fall, it said. Temasek's biggest portfolio companies include Nvidia, Amazon, Tencent and Alibaba. This year, it participated in OpenAI's $122bn capital increase and Anthropic's $65bn funding round. Both companies are on course for blockbuster listings. Rohit Sipahimalani, Temasek's chief investment officer, said holding listed shares of AI companies would allow the state investor to deal with high valuations better. "If there are periods where we see valuations getting very stretched, we have the flexibility [with] the liquid portion -- which is a large part of our AI exposure -- to trim our exposure in those areas and then reallocate to other areas," he said. Temasek also outlined plans to increase its exposure to private credit from 2 per cent of its total portfolio to 5 per cent by 2031. The commitment comes as other large investors are ploughing into the asset class following an exodus of smaller retail clients concerned by several high-profile corporate collapses. Temasek said it continued to believe private credit could generate equity-like returns with a lower risk than private equity. "Across the board, we are still seeing reasonably good opportunities in the market," said Alpin Mehta, head of private equity capital solutions at Temasek's partnerships business. Temasek was set up in 1974 to manage the Singaporean government's stakes in large domestic companies after they were privatised. In recent decades, it has increased its investment overseas. Together with Singapore's larger sovereign wealth fund GIC and the central bank, they account for about a fifth of the city-state's budget, allowing the country to run a surplus for much of the past two decades. In April, it underwent its biggest restructuring since 2011 to focus on improving returns. Under the new structure, the group was split into three segments: domestic companies, which account for 43 per cent of the portfolio; global investments, which make up 38 per cent; and partnerships and fund companies, which comprise 19 per cent. Over the past 10 years -- during which time its assets have doubled -- Temasek averaged an annual return of 7.1 per cent, compared with MSCI World's 12.6 per cent. Over 20 years, it has yielded 6.8 per cent annually, compared with MSCI World's 9.3 per cent.

Singapore's Temasek boosts China exposure by $7.7 billion, biggest rise in five years, in AI-driven pivot

Temasek is repositioning its China portfolio toward AI-related hardware and infrastructure, robotics, biotech, energy transition. Temasek Holdings increased its China exposure by 10 billion Singapore dollars ($7.7 billion) last fiscal year -- the biggest annual increase in five years, as the state investor repositions its portfolio in the country for a new growth cycle led by artificial intelligence and advanced technology. "We saw a rebound in China," Chief Executive Officer Dilhan Pillay said at the firm's annual review Wednesday, adding that the firm's China exposure has grown by about SG$24 billion over the past decade. Temasek's 5-year total shareholder return stood at 4.6% for the year ended March, weighed down by headwinds from China's capital markets from 2021 to 2024, it said, adding that its exposure last year grew alongside a rebound in market valuations. While Temasek's underlying country exposure to China declined to 17%, from 29% in 2020, it remains the fund's third-largest market after Singapore at 27% and the Americas at 26% -- which rose from 24% a year earlier. Within China, the firm is rotating away from sectors that characterized earlier phases of its portfolio -- consumer and real estate -- toward what it called "hard tech," such as AI-related hardware and infrastructure, robotics, biotech, energy transition. China "is no longer the high-growth economy -- it's becoming a maturing economy," said Chia Song Hwee, CEO of Temasek Global Investments. "We need to be selective in when we invest [and] construct a portfolio that is more relevant in this current regime." For consumption, Temasek sees opportunities in spending on experiences over goods, and homegrown consumer brands that have proved innovation capabilities, over foreign brands. But recovery in domestic consumption remains "uneven and not yet broad-based," it said, and additional policy easing remains unlikely.

Singapore's Temasek hits record portfolio value, eyes more investment in AI, infrastructure and private credit

The firm will look at investing in AI, private credit, and what it calls "core-plus" infrastructure. Singapore state investor Temasek Holdings saw its net portfolio value climb to 518 billion Singapore dollars ($401 billion) for the year ended March 31, a second straight annual record. Temasek recorded a 10.5% total shareholder return in the financial year, which it said was driven by the strong performance of its Singapore holdings as well as gains from divestments. The Straits Times Index rose more than 23% from April 2025 to March 2026, powered by the Equity Market Development Programme announced by the country's monetary authority to unlock greater value in stocks. Returns would have been better if not for the Iran war that broke out on Feb. 28, which dragged down portfolio value by about 2%. A stronger Singapore dollar also reduced the one-year total shareholder return by about 2 percentage points, Temasek said in a media briefing. Singaporean companies that the investor holds stakes in include DBS Bank, Southeast Asia's largest bank, Singapore Airlines, and telecommunications firm Singtel. Temasek made SG$31 billion of divestments in the period, among them a reported S$8.18 billion stake sale in Schneider Electric India in June 2025. Five-year total shareholder returns were 4.6%, depressed by headwinds in China's markets from 2021 to 2024, Temasek said. The firm portfolio exposure to China has been pared down in recent years, from 29% in 2020 to 2026's figure of 17%. However, Temasek said it "remains committed" to China, pointing out that in absolute terms, its exposure to the world's second-largest economy increased by SG$10 billion over the past year. On a 10-year basis, total shareholder returns stood at 7.1% in Singapore dollar terms. Temasek said it sees opportunities in three areas: artificial intelligence, private credit, and what it calls "core-plus" infrastructure such as renewable and nuclear energy, energy storage, and decarbonization technologies. This "core-plus" area will be increased to 5% in the next five years, Temasek said. The firm intends to boost AI-related exposure in its portfolio to 15% by 2031, up from the current 6%. While current investments include Anthropic and OpenAI in the U.S., Temasek said it intends to deploy capital across areas of the value chain including cloud service providers, foundation models, and AI applications. "[We] see the rapid advancement of AI as a pivotal phase that will create vast new opportunities." Temasek also aims to more than double its portfolio value for private credit to 5% by 2031, from the 2% currently. The firm intends to focus on senior secured structures that will provide downside protection and strengthen diversification such as corporate lending, asset backed financing and real estate credit. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.