The figure is small, and the plan is precise. Temasek, Singapore’s state investment firm, has about 6% of its S$518 billion portfolio, roughly US$405 billion at the end of March, riding on artificial intelligence, and it wants to lift that share to as much as 15% by 2031. The more telling move, though, is what the fund intends to do with the AI money it already holds: shift it out of private companies that are hard to sell and into publicly traded shares that can be moved in a day.
Speaking at the Milken Institute Asia Summit in Singapore this week, Temasek’s chief investment officer, Rohit Sipahimalani, said the firm plans to raise the portion of its AI exposure held in listed securities from about half today to between 70% and 75%. Under that plan, stakes in private model developers such as OpenAI and Anthropic would increasingly give way to positions in companies whose shares trade every day, among them Nvidia, ASML and Tencent.
The reasoning is not a retreat from the technology. Sipahimalani has spent the week arguing that an unwinding of the AI trade is the biggest risk facing global markets and that the sector could hit turbulence in 2027. Temasek, he said, still expects to add to its AI holdings over the long run. The change is about the terms on which the fund holds that conviction, not the conviction itself.
Private investments bind an investor for years. They are priced in funding rounds rather than on an exchange, often at valuations far above what public markets would assign, and they are difficult to exit when sentiment turns. A listed position can be valued every minute and sold the same afternoon. “AI is such a fast-changing environment, things could change quite easily and you have to be able to pivot,” Sipahimalani said. The word pivot carries the whole argument.
Temasek frames the shift as a matter of liquidity and discipline. The firm has said it keeps about a quarter of its portfolio in liquid assets precisely so it can absorb shocks and reposition quickly when trends change. Moving AI exposure toward the public market buys it the same freedom on its most volatile trade: the ability to cut on short notice rather than wait out a lockup.
The fund is one of the world’s largest state investors, with a book spread across every major market. Its size is part of why the arithmetic matters. A shift of a few percentage points in a S$518 billion portfolio moves tens of billions of dollars, and the direction of that shift tells the rest of the market which way a patient, well-capitalized buyer is leaning.
The mechanics are plain in the firm’s holdings. Temasek’s AI book spans the full technology stack, from power infrastructure and semiconductors to cloud services, foundation models and applications. A growing share of that money would sit in chipmakers, equipment suppliers and listed internet platforms under the new plan, where a position can be marked to market daily and unwound the same day.
The posture is also a quiet statement about risk. Temasek runs a long-term portfolio, carries net cash on its balance sheet and marks its holdings to market. Its executives have signaled they do not want to bet on a one-way rise in AI valuations. Raising the public share of the exposure keeps the upside while buying an exit, the sort of trade a patient investor makes while markets are still climbing.
Sipahimalani named two risks for 2027, and the AI trade topped the list, with inflation close behind. Higher energy prices, supply-chain disruptions or geopolitical conflict could keep price pressures elevated, he argued, pushing bond yields to a level that finally cracks the equity rally. The two threats are linked: the same capital that has flowed into chips and data centers would be the first to flee if borrowing costs stayed high.
Analysts read the move as prudence dressed up as strategy, a hedge taken before a decline rather than after one begins. The timing is deliberate. AI valuations have climbed steeply over the past two years, and private rounds now sit well above what public markets would pay for comparable companies. Converting some of those paper gains into liquid, listed positions is a way to bank flexibility without abandoning the sector.
The framing is unusual for a fund of Temasek’s kind. Sovereign-style investors are typically slow to name a trade they hold heavily as a top risk, because doing so invites the question of why they are still in it. Sipahimalani’s answer is that Temasek is in AI for the long run, and that long-run conviction is compatible with short-run wariness. The difference between a bubble and a boom, in his account, is not whether valuations are rich but whether an investor can exit when the exit is needed.
For everyone else, the lesson is the one that circulates at the end of every boom: the people closest to a trade are often the first to start measuring the distance to the door. Sipahimalani did not predict a crash. He predicted bumps, and then spent the rest of his remarks explaining how his fund plans to be somewhere else, or at least more liquid, when they arrive.
