Temasek to double down on AI as portfolio value hits $401b

Temasek’s net portfolio value increased by 14.8% to US$401 billion in the fiscal year ending March 31, 2026 (FY26), it announced today.

This was driven by the strong performance of listed, Singapore-based portfolio companies and realized gains of key divestments, such as in seed supplier Axia Vegetable Seeds Group and power company Schneider Electric India, the state-owned investor said.

Temasek’s leadership team / Image credit: Ulla

In FY26, Temasek invested a total of US$39 billion against divestments of US$24 billion, resulting in a net investment of US$15 billion.

Key global investments made during the year include AI giants Anthropic and OpenAI as well as coffee tech firm Luckin Coffee.

Temasek said doubling of its net portfolio value over the past decade reflected the strength of its underlying assets, how it manages liquidity, and the discipline at which it recycles and deploys capital.

Ten-year total shareholder return (TSR) stood at 7.5% in US dollar terms, higher than the five-year figure of 5.4%, which the firm said was weighed down by headwinds in China’s capital market between 2021 and 2024.

On a constant currency basis, Temasek’s one-year TSR stood at 12.9%.

At 27%, Singapore is Temasek’s largest market by country exposure, followed by the US (26%) and China (17%). The firm said it remains committed as a long-term investor in China, where it sees compelling opportunities in areas like biotech, robotics, AI-related tech, and advanced manufacturing.

AI currently makes up 6% of Temasek’s overall portfolio, though it aims to increase this to 10% to 15% by March 2031.

Doubling exposure to AI

Capital will be deployed across the AI value chain, including energy and data centers, to semiconductors and AI applications. Temasek said this allows the firm to participate in the “broader growth of the ecosystem,” rather than relying on any single segment or tech.

At supersized valuations, AI companies can offer early-stage investors much upside, though this comes with risks. How does Temasek strike a balance between investing early for greater upside and participating in later-stage rounds that offer more certainty?

The firm noted that within AI, not all segments “are equally priced or equally investable.”

“Our approach to AI is consistent with our overall investment approach – we continue to balance innovation exposure with portfolio resilience, investing across different stages of company development and across different segments of the AI value chain,” it explained.

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SEA’s role