Singapore's state-owned investment firm Temasek announced plans to significantly increase its exposure to artificial intelligence, targeting 15% of its portfolio by 2031, up from the current 6%. The announcement came as the firm reported a record net portfolio value (NPV) of S$518 billion ($400 billion) for the financial year ended March 31, 2026.
Record Portfolio Value and Shareholder Returns
Temasek's NPV rose for the second consecutive year, increasing by S$49 billion (approximately $38 billion) from the previous year. The one-year Total Shareholder Return (TSR) stood at 10.5% in Singapore dollar terms. The surge was driven by strong performance from its Singapore-based portfolio and gains from key divestments, the company said.
However, the outbreak of the Iran war in late February 2026 eroded about 2% of the NPV gains in March. A stronger Singapore dollar also reduced domestic returns by two percentage points. Excluding currency impact, the TSR would have been 12.9% on a constant currency basis. In US dollar terms, the TSR was 14.8%.
AI as a Strategic Priority
“AI is integral to how we sense emerging opportunities, adapt our portfolio, and thrive as an institution,” said Temasek CEO Dilhan Pillay during a media briefing. He emphasized that the firm has benefited from past digitization waves and views AI as a pivotal phase that will create new opportunities.
Temasek identified five focus areas for AI capital deployment: energy and data centers, semiconductors, cloud services providers, foundation models, and AI applications and software infrastructure. The firm noted that some companies in these areas operate as vertically integrated mega-caps.
China Exposure and Long-Term Returns
Despite headwinds in the 2021-2024 period that reduced the five-year TSR to 4.6% from a 10-year TSR of 7.1%, Temasek said it remains an active investor in China. Underlying exposure to China increased by S$10 billion ($7.7 billion) over the year. The company mitigated the impact through stronger execution and portfolio focus, which led to robust returns in the past two years.
Temasek's disciplined approach and strategic bets on emerging technologies underline its commitment to delivering sustainable long-term returns, even amid geopolitical uncertainties and currency fluctuations.
