Temasek Remains Cautious on Cryptocurrency Investments
During the Singapore FinTech Festival on November 16, 2023, Nagi Hamie, president of Temasek Global Investments, stated that the company is not considering investments in cryptocurrencies at this time. This decision comes as Temasek seeks to recover from significant losses related to its investment in the now-defunct cryptocurrency exchange FTX.
“We are not investing directly in cryptocurrencies,” Hamie explained in an interview, pointing out the lack of regulatory clarity in the field. “It’s difficult to predict how cryptocurrencies will integrate into major economies given possible changes in regulations.” The focus for Temasek currently lies in blockchain technology and its real-world applications.
The company faced heavy backlash following its $275 million write-down linked to FTX in 2022, with Singapore’s deputy prime minister calling the financial hit “unfortunate” for the nation’s image.
AI’s Role Over Cryptocurrency
When discussing future investments, Hamie expressed a preference for artificial intelligence over frontier models. He noted that not every context suits a cutting-edge model; rather, it’s about the effective application and the companies that leverage AI to create competitive advantages.
Hamie is particularly optimistic about the tangible implementations of AI, such as automation and robotics. He mentioned plans to raise Temasek’s AI investment portfolio from 6% to 15% by 2031. Although some valuations appear inflated, he believes the AI investment cycle is still in its infancy and will continue for decades. The firm is exploring opportunities across the AI value chain, carefully managing risks through long-term contracts with reliable partners.
European Focus Amidst Challenges
Hamie noted that Temasek has withdrawn around 12 billion euros (approximately $14 billion) from Europe over the last two years, trailing only the United States in capital outflow. He disregarded the surrounding macroeconomic and political uncertainties, asserting that Europe holds significant potential in luxury goods, consumer brands, and energy transition sectors, which Temasek is willing to engage with through steady, long-term investment.
As for the Middle East, he acknowledged that while the region’s transformational journey remains promising, the ongoing conflict has yet to reveal its full implications. “We can only wait and see how this situation will unfold in a shifting global landscape,” he remarked.
Balanced Stance on Defense Investments
Addressing the topic of defense investments, Hamie clarified that Temasek is taking a practical view. They’re not committed to fully embracing or shunning the sector. The company mainly invests in dual-use technologies relevant to both civilian and military applications, strictly avoiding any involvement with biological or chemical weapons. Their participation in this area is limited to strategic partner ST Engineering.
Hamie emphasized that all investment decisions are analyzed based on clear criteria, taking into account corporate governance and the potential for real-world impacts.
