Key Takeaways:
Singapore's Temasek plans to nearly triple AI exposure to 15% of its $401 billion portfolio by 2031 while ruling out crypto investments.
Temasek Holdings plans to increase its artificial intelligence investments to 15% of its SGD 518 billion ($401 billion) portfolio by 2031, more than double its private credit allocation and rule out further crypto investments after a $275 million loss from the FTX collapse.
"We don't have directly any investment in crypto, and I can't forecast what role crypto is going to play depending on different regulations," Nagi Hamiyeh, president of Temasek Global Investments, said in a briefing.
The Singapore state investor aims to lift AI-related holdings from 6% of its portfolio, focusing on energy and data centers, semiconductors, cloud service providers, foundation model developers and AI applications. Private credit will rise to 5% from 2%, targeting senior secured structures including corporate lending and asset-backed financing. A new "core-plus" infrastructure category covering renewable and nuclear energy will reach 5% within five years.
The reallocation comes as Temasek seeks to improve returns after five-year annualized total shareholder returns of 4.6% lagged the MSCI World benchmark, weighed down by China market headwinds from 2021 to 2024. The firm's China exposure has fallen to 17% from 29% in 2020, though absolute exposure rose by SGD 10 billion over the past year.
Temasek recorded a 10.5% total shareholder return for the year ended March 31, its second straight annual record, driven by strong performance from Singapore holdings including DBS Bank, Singapore Airlines and Singtel. The Straits Times Index rose more than 23% over the period, supported by the Monetary Authority of Singapore's Equity Market Development Programme. Returns would have been about 2 percentage points higher without the Iran conflict that broke out on Feb. 28 and a similarly sized drag from a stronger Singapore dollar.
The firm made SGD 31 billion of divestments during the period, including a reported SGD 8.18 billion stake sale in Schneider Electric India in June 2025. On a 10-year basis, total shareholder returns stood at 7.1% in Singapore dollar terms.
AI Strategy and Valuation Risks
Temasek has invested in several major AI-linked companies including Nvidia, Amazon, Tencent and Alibaba, and participated in funding rounds for OpenAI and Anthropic this year. Hamiyeh said the AI investment cycle has just begun and will continue for decades, while cautioning that valuations in some parts of the industry have run ahead of business fundamentals. "Not every situation needs frontier models," he said. "It's all about the applications and the companies that embrace AI and build a moat."
The firm's pivot away from crypto follows the 2022 collapse of FTX, which forced Temasek to write off its entire $275 million investment. The episode contributed to stricter crypto supervision by the Monetary Authority of Singapore, including higher compliance costs and slower licensing for digital asset firms. Hamiyeh said Temasek continues to explore blockchain technology and its potential to transform the real economy even as it focuses on AI adoption.
This article is for informational purposes only and does not constitute investment advice.
