Temasek targets 15% AI portfolio share as assets hit S$518B record

Singapore state investor Temasek pushed its portfolio to a record S$518 billion ($401 billion) in the year ended March 2026, doubling net new investments to S$20 billion as it targets a tripling of AI exposure by 2031.

"We're not simply in a Vuca world, we are in a polycrisis world," Chief Executive Officer Dilhan Pillay said. "The environment we are in today is the most complex that we have seen in five decades."

Temasek added S$51 billion in new investments while divesting S$31 billion, compared with S$52 billion invested and S$42 billion divested a year earlier. The acceleration marks a sharp rebound from the financial year ended March 2024, when it deployed just S$26 billion against S$33 billion in divestments. Under its T2030 strategy, the firm restructured its holdings into three pillars: Temasek Portfolio Companies, Global Direct Investments, and Partnerships, Funds and Asset Management.

The record portfolio and aggressive redeployment show that patient institutional capital sees structural opportunity in AI and alternative credit even as geopolitical volatility persists. Temasek aims to grow AI-focused investments to as much as 15% of its portfolio by March 2031, up from 6%, while targeting 5% each in core-plus infrastructure and private credit — a combined quarter of total assets directed at three high-growth areas.

AI Exposure to Triple to 15% by 2031

Temasek has added AI heavyweights Anthropic and OpenAI, alongside Elon Musk's newly listed SpaceX, to its global holdings over the past year. The investments span the full AI value chain — from energy infrastructure and semiconductor chips through cloud services and foundation models to software applications.

"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," said Chia Song Hwee, chief executive officer of Temasek Global Investments. He described AI as a "natural extension" of the digitalization trend Temasek has invested behind since around 2016.

The firm is also embedding AI into its own operations through company-wide training programs and AI tools for specialized tasks, while working with its Singapore-based portfolio companies on adoption plans. Temasek's portfolio companies employ about 400,000 people globally, including more than 160,000 in Singapore.

"What we aim to do is build a portfolio of globally competitive companies with strong roots in Singapore," said Png Chin Yee, president of Temasek Singapore. "One big thing that we talk about with AI is also making sure that the workforce is ready, and the workforce is upskilled and reskilled for the new job roles that we see ahead."

Private Credit, Infrastructure Offer Near-Term Returns

Beyond AI, Temasek is scaling up exposure to core-plus infrastructure and private credit, areas Chief Investment Officer Rohit Sipahimalani described as "compelling opportunities" for near-term returns. The firm's private credit portfolio has crossed S$13 billion from an initial S$10 billion and now generates more than S$1 billion in annual recurring income.

"What we like about that is that it offers us a very, very attractive risk-adjusted return with significant downside protection and equity subordination," said Alpin Mehta, head of private equity capital solutions at Temasek Partnership Solutions.

Temasek's sustainable living portfolio rose about 7% to S$49 billion, with S$5 billion invested in renewable energy, power grids and energy transition businesses. However, the firm said it is unlikely to meet its 2030 target of 11 million tons of carbon dioxide equivalent, citing surging electricity demand, higher capital costs and policy volatility. Portfolio emissions stayed flat at 21 million tons in the year ended March 2026, down 30% from 2020.

"We're pragmatic because we retain our ambition toward net zero, while remaining commercially disciplined in how and where we deploy capital," said Jasmine Teo, director of sustainability strategy at Temasek International.

Within the Global Direct Investments segment, Temasek invested S$37 billion and divested S$24 billion over the past year. The firm is concentrating on larger tickets and deeper domain knowledge rather than spreading capital thinly. "What we are focusing on, what we have told the teams, is to invest in larger tickets, so that we do less deals, have deeper domain knowledge, and are much more focused in a granular fashion on a handful of sectors," said Nagi Hamiyeh, president of Temasek Global Investments.

This article is for informational purposes only and does not constitute investment advice.