Rohit Sipahimalani, Chief Investment Officer at Temasek International, identified a potential reversal in the artificial intelligence trade and inflation-driven increases in bond rates as primary risks for global markets entering next year. These factors could halt the current equity market rally.

Temasek, the Singapore state investor, plans to significantly increase its AI-related exposure. As of March 31, 2026, AI represented 6 percent of its portfolio value. The firm aims to raise this share to 15 percent by March 31, 2031, not including AI exposure held through its Singapore-based portfolio companies.

The investment strategy includes energy and data centers, semiconductors, cloud-service providers, foundation models, applications and software infrastructure. Temasek also focuses on core-plus infrastructure and private credit as investment areas.

Sipahimalani said the firm aims to build a resilient portfolio that can weather different growth and inflation regimes, trade tensions and developments in AI.

Temasek's net portfolio value stood at approximately $401 billion as of March 31, 2026. The firm recorded a one-year total shareholder return of 10.5 percent in Singapore-dollar terms and 14.8 percent in U.S.-dollar terms for the financial year ended March 31, 2026.

During that financial year, Temasek invested S$51 billion and divested S$31 billion. The firm plans to continue allocating capital towards a low-carbon economy while capitalizing on AI opportunities.

The regional economic outlook for the ASEAN+3 area remains sensitive to the AI investment cycle. Under an adverse technology scenario involving weaker global AI investment, growth for the region could decelerate to 2.5 percent in 2027, compared with a baseline forecast of 4.0 percent made in July. An October outlook for ASEAN+3 projected a 4.1 percent growth rate in 2027 and an inflation rate of 1.7 percent.

Chia Song Hwee, CEO of Temasek Global Investments, said Temasek views AI as a continuation of a digitization trend it has supported since approximately 2016, rather than a completely new investment theme. Jane Atherton, Temasek's North America Head, noted that companies funding AI infrastructure anticipate these large-scale investments will deliver risk-adjusted returns with increasing AI adoption.