Temasek comfortable with current AI spending levels, executive says

Temasek Confident in AI Investments Amid Rising Hyperscaler Spending

Temasek's Perspective on AI and Hyperscaler Investment

By Paritosh Bansal

Temasek's Confidence in AI Buildout

BOSTON, Oct 1 (Reuters) - Singapore's Temasek is not worried about the massive levels of spending from hyperscalers powering the AI buildout, its executive said on Thursday, as the state investor works to increase its exposure to the technology.

Speaking at the Reuters Investment USA event in Boston, Temasek's North America Head Jane Atherton said the companies funding the infrastructure believe the large-scale investments will yield risk-adjusted returns with the growing adoption of AI.

"Underpinning all of this AI buildout are some of the strongest balance sheets in the world... we remain incredibly positive on AI," Atherton said.

Market Environment and Spending Concerns

Impact of Monetary Policy and Bond Selloff

A selloff in global bonds and expectations of tighter monetary policy have called into question the sustainability of the enormous spending commitments undertaken by tech giants in a high-interest rate era.

Forecasts for Hyperscaler Capex

Analysts have forecast hyperscaler capex to surpass over $1 trillion by 2027, driven predominantly by the need to fund costly chips and data centers to satisfy massive amounts of compute.

Temasek's Portfolio and AI Strategy

Current Holdings and Major Investments

Temasek, which owns stakes in Anthropic and OpenAI, is one of the world's largest state investors with overall holdings valued at about $400 billion.

The firm's holdings in the US accounts for 26% of the portfolio, with significant stakes in companies spanning financial services and technology, counting BlackRock, Mastercard and Nvidia among its major investments.

Future AI Investment Plans

Temasek laid out plans earlier this year to increase its investment in the AI ecosystem to as much as 15% of the portfolio over the next five years, from about 6% now.

AI Safety and Regulatory Concerns

Debate Over Speed of AI Development

The conversation around the speed of AI development has taken center stage after leading companies have called for a slowdown, warning that rapid advances could risk spelling the end of humanity.

Role of Governments and Companies

Atherton said the question of AI safety needed to be addressed by governments and the companies developing the technology.

Pricing Existential Risk

"I really don't know how you price the end of humanity, except that if it happens, it won't really matter," Atherton said.

(Reporting by Paritosh Bansal in Boston and Utkarsh Shetti in Bengaluru; Editing by Arun Koyyur)