Temasek, one of Asia's largest investors, identified artificial intelligence and inflation as the primary risks for global markets in the coming year. Investment chief Rohit Sipahimalani expressed concern that heavy US capital expenditure on AI infrastructure, including data centers and chips, may not yield expected returns, potentially causing market disruption.
Despite these risks, Temasek intends to increase its AI-related investments from approximately 6% to 15% of its portfolio by 2031. The firm reported a record net portfolio value of SGD 518 billion, or approximately $401 billion, as of March 31, 2026, representing a 10.5% year-over-year increase.
The Monetary Authority of Singapore also warned of rising capital costs due to AI spending. A stress test conducted by the central bank on September 22, 2026, indicated that 32% of Singapore-listed companies could face significant revenue shocks in the event of an AI market downturn.
The ASEAN+3 Macroeconomic Research Office noted that Asian economies are particularly vulnerable to a potential cooling of the AI sector. Analysts suggest that high demand for energy and semiconductors driven by AI could keep inflation and interest rates elevated, impacting project funding hurdle rates.
