Temasek to grow AI investments to 15% of its portfolio by 2031

SINGAPORE – Temasek will be putting more money into artificial intelligence-focused investments in the next five years, with a target to more than double its portfolio exposure to such equities.

This will add to the investments it made in AI over the past year, including in world-leading foundation model developers like Anthropic and OpenAI, as well as Elon Musk’s newly listed SpaceX.

AI investments currently make up around 6 per cent of Temasek’s portfolio. Temasek aims to grow this to up to 15 per cent by March 31, 2031.

This excludes AI exposure through its Singapore-based portfolio companies.

Temasek chief executive Dilhan Pillay said in a recorded video address to the media on July 6: “Generative AI is reshaping business models and the nature of work itself, bringing both opportunities and risks.”

He added that AI is integral to how Temasek senses emerging opportunities, adapts its portfolio and thrives as an institution.

Temasek is looking at five aspects of AI along the entire value chain. These include energy and data centres, such as its investment in Neoen, a French renewable energy company that Temasek bought alongside Canadian asset management firm Brookfield.

Temasek is also invested in semiconductor companies, such as Taiwan’s foundry TSMC, US chip giant Nvidia and home-grown semiconductor testing company AEM.

It also looks at cloud service providers, with holdings in AWS, Alibaba Cloud and Google Cloud, alongside foundation model companies like OpenAI and Anthropic.

Lastly, it invests in AI applications and software infrastructure firms like Physics X, a London-based tech company, and Databricks, an American software firm.

Pillay noted that in these five areas, some of the companies Temasek invests in are leaders in their field, while others are vertically integrated across other areas.

“Across the board, these investments reflect our view of AI as a structural, long-term driver of value creation,” he said.

The US will be a key destination for AI investments, Temasek’s leaders added.

Temasek Global Investments president Nagi Hamiyeh said in the media briefing that the main driving trend in the US is around AI, and that Temasek intends to invest across the value chain so it is diversified enough.

“The trend is irreversible,” he said, while acknowledging that there might be issues over how critical some parts of the AI value chain are.

“The fact that we’re diversified across the different main parts of it provides us with the comfort that the growth will be there and the returns offering should be there as well,” he said.

Temasek Global Investments chief executive officer Chia Song Hwee also responded to questions on concerns around the AI bubble and that companies may be overvalued.

“AI is a theme that is going to last for multi-decades, just as the internet was,” he said. “We believe that as the technology gets developed and evolves, we’re going to have market cycles, we’re going to have volatility, and there’ll be periods of overvaluation, but one cannot stay away from investing because of those risks.”

He added that what Temasek needs to do is ensure that it understands the risks and has ways to manage them.

One way that it deals with the challenge is to invest across segments of AI and in companies where AI is not the only business they have.

Chia added that the AI investments are a “natural extension” of Temasek’s investment in the digitalisation trend, which started in 2018 and 2019.

He said the 15 per cent target for AI exposure in Temasek’s portfolio is what it believes to be manageable, and that will allow Temasek to still ride through periods of market correction.

He also noted that it will not be a linear path to the 15 per cent target, as Temasek will need to look at the overall environment and valuation of companies.

Chia added that Temasek will still need to invest in sectors other than AI, which will underwrite some of the risks that may occur during periods of volatility, and potential overvaluation of the AI sector.

In 2025, it was reported that Temasek cut back on its investments in early-stage companies, choosing to focus on later funding rounds.

Temasek International chief investment officer Rohit Sipahimalani noted that the strategy is to focus on investing through its venture capital firms, and then double down by investing directly in the companies when they break out.

Hamiyeh also said that early-stage start-ups, especially those in the AI space, now scale so rapidly that they could break out of the early stages as quickly as within months.

Upskilling the workforce with AI

Alongside ramping up investments in AI and AI-related companies, Temasek’s broader AI strategy also encompasses raising its workforce’s proficiency and future-proofing its portfolio companies.

The remaining 85 per cent of Temasek’s portfolio that comprises non-AI companies “must be focused on AI adoption for competitiveness” as that is where it will see “value capture”, said Pillay.

In addition to engaging with the management teams and boards at its portfolio companies on AI, Temasek is also partnering with unions and government agencies to redesign jobs, and reskill and upskill their workforce, he said.

“We want to empower our people to harness AI, not be replaced by it.”

AI will be a “multi-decade” trend that will compel companies to rethink their business models and how they can raise efficiency, add new revenue streams, and better serve their customers, said Temasek chief financial officer Png Chin Yee, who will be stepping down in October to focus on her role as president of Temasek Singapore.

In response to a question on whether AI could potentially reduce the portfolio companies’ workforce, she stressed that companies should ensure that their employees will benefit from AI transformation through new job roles and opportunities.

Temasek’s portfolio companies hire around 400,000 people globally, including over 160,000 in Singapore.

“I think it’s important for us to know what the possibilities are, but at the same time I think we need to be very clear that our AI transformation has to bring people along with us,” she said.

“This is a journey that we all have to undertake to be globally competitive.”

With the next wave of AI adoption in the physical world on the horizon, investing solely in large language models will not be enough. This is where the portfolio companies could benefit from the unique access to physical AI companies that Temasek already has stakes in, its leaders said.

The domain expertise of Temasek’s portfolio companies and their vast data can also attract AI companies seeking to build real-world models to further their technological development.

“There are already discussions with some of our portfolio companies on how they can collaborate together... to connect the dots between our companies and our global investments,” Hamiyeh said.