Temasek CIO Identifies AI and Inflation Risks for 2027

Temasek's investment chief Rohit Sipahimalani identified the unwinding of artificial intelligence (AI) trades as the biggest risk to global markets, while also planning to increase AI investments from 6% to 15% of its portfolio by 2031. Speaking at the Milken Asia Summit 2026 in Singapore, he noted that while an AI unwind is not imminent, market fluctuations could occur in 2027. Temasek, managing S$518 billion (405 billion USD), holds stakes in leading AI firms like OpenAI, Anthropic, and Nvidia. Sipahimalani aims to shift more AI investments into public markets, increasing the current 50% share to 70%-75% for greater flexibility. His second concern is inflation and the rates environment, which he believes could lead to a breaking point in equity markets. He emphasized that rising energy costs and government borrowing are already impacting bond markets, contributing to the risk. Other investors, including Ray Dalio and Michael Burry, have also expressed concerns about the potential AI bubble, linking it to rising interest rates and debt-funded spending.

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