Singapore’s Temasek is still avoiding direct cryptocurrency investments nearly four years after its loss from FTX, while keeping its focus on artificial intelligence (AI) and blockchain infrastructure.
Temasek says it has no direct crypto exposure
CNBC reported on Thursday that the sovereign wealth fund has no direct exposure to crypto. Nagi Hamiyeh, president of Temasek Global Investments, told the channel that regulatory uncertainty remains a key reason why the asset class has been kept out of Temasek’s current investment portfolio.
Hamiyeh said he could not predict what role crypto may play in the broader economy adding that the sector’s future depends on how regulations develop across major markets.
For now, Temasek is separating crypto assets from the broader technology behind them. The fund is not buying cryptocurrencies directly, but it is still watching blockchain and related infrastructure for real-world use cases.
That leaves room for areas such as payments, tokenization, financial infrastructure, digital identity and data systems.
FTX loss remains a bitter reminder
Temasek’s cautious stance follows its 2022 write-off of its full $275 million investment in FTX. The fund had invested $210 million in FTX International and $65 million in FTX U.S. between October 2021 and January 2022.
FTX has since fallen and Temasek has subsequently taken a write-off on the investment. The loss was a disappointment in Singapore as Temasek is a significant state-owned investment firm.
The FTX investment was to provide it with exposure to the digital asset market infrastructure, rather than to direct cryptocurrency trading, Temasek said at the time.
The fund added that it had done its due diligence prior to its investment, which involved reviews of the financial statements, regulatory issues, licensing, sanctions, anti-money laundering controls and cyber security risks.
However, Temasek later said its trust in Sam Bankman-Fried’s judgment and leadership appeared to have been misplaced. That’s a significant lesson that it has had to learn for its present wariness of cryptos.
AI becomes a bigger investment focus
While crypto remains outside Temasek’s direct investment plan, Hamiyeh said the fund sees stronger long-term value in artificial intelligence adoption.
He said Temasek is more focused on companies that use AI in practical ways than on frontier models alone. That includes automation, robotics, industrial process improvements, data centers and energy infrastructure.
“Not every situation needs frontier models,” Hamiyeh said.
Temasek aims to raise its AI exposure from 6 percent of its portfolio to 15 percent by 2031, according to CNBC. Hamiyeh said the AI cycle is still early and could last for decades, though some valuations have already moved ahead of business fundamentals.
