crypto, defense, AI, European luxury names
Temasek Holdings Pte Ltd during the Singapore FinTech Festival held in Singapore on Thursday, November 16, 2023. sign. The festival will last until November 17.
Lionel Ng | Bloomberg | Getty Images
Nagi Hamiyeh, chairman of Temasek Global Investments, said crypto investment is “still off the table” for the company as it tries to overcome a significant loss on crypto exchange FTX.
“We don’t have any direct investments in crypto,” Hamiyeh told CNBC’s Sri Jegarajah on Wednesday, citing regulatory uncertainty in the sector. “I cannot predict what will happen in the future and the role cryptocurrency will play in the mainstream economy depending on the different regulations that may occur.”
For now, the company is focusing on blockchain and its infrastructure, based on what the technology can do for the real economy.
Temasek’s investment in the now-bankrupt FTX cryptocurrency exchange resulted in losses of $275 million in 2022, prompting local criticism. Lawrence Wong, Singapore’s deputy prime minister and finance minister at the time, called the loss “disappointing” and damaging to Singapore’s reputation.
Here are other key takeaways from the interview:
Artificial intelligence application on boundary models
When asked what is more important for a long-term investor, Hamiyeh said he would bet on the adoption of artificial intelligence and building the commercial ecosystem around it, rather than pushing frontier models.
“Not every situation needs leading models. It’s all about applications and companies embracing AI and building moats.”
Its most long-term bet is on the physical application of AI: automation, robotics and industrial process optimization. Temasek aims to increase its AI exposure from 6% of its portfolio in the last financial year ending in March to 15% by 2031.
Hamiyeh added that although valuations in some parts of the industry are ahead of fundamentals, the AI investment cycle is still early and will continue for decades. Temasek said it was investing across the entire AI value chain, including energy infrastructure and data centres, where long-term contracts with highly rated counterparties keep risk “very, very minimal”.
European luxury, industrialists
Hamiyeh announced that Europe has attracted approximately 12 billion euros ($14 billion) of Temasek capital in the last two years, after the USA.
Putting macro and political noise aside, he noted Europe’s “right to win” in world-leading luxury, consumer brands, energy transition and family-owned industries on the continent, where Temasek has arrived with long-term patient capital.
Regarding the Middle East, he said that the region’s long-term transformation story remains intact, but the consequences of the conflict have not yet fully emerged.
“I believe there is still the long-term view of what the role of the Middle East will be in the new bifurcated world… but we have to wait and see what the consequences of this conflict will be.”
Practical approach to defense
Asked whether defense contractors belong to a portfolio that emphasizes sustainability and ethical investment, Hamiyeh said Temasek is taking a practical approach and will not completely take control of the sector.
The company mainly looks at dual-use technologies that can be used in civilian environments or in combat. Biological and chemical weapons are categorically prohibited. Temasek’s only space-related activity is ST Engineering.
“We look at each investment on a case-by-case basis,” Hamiyeh said, including corporate governance and their contribution to any real-world conflict.
