Rohit Sipahimalani, Temasek's chief investment officer, highlighted at the Milken Institute Asia Summit that while the AI sector has been a major driver of U.S. stock market resilience, particularly keeping the S&P 500 near record highs, there are underlying weaknesses.
He noted that nearly half of the stocks in the Russell 3000 are significantly below their June peaks, indicating that the market's strength is concentrated among a few leading companies. Sipahimalani cautioned that a reversal in the AI trade could occur due to regulatory pressures or insufficient returns from AI investments.
Despite these concerns, Temasek remains optimistic about the long-term potential of AI and is actively increasing its investments in the sector, aiming to raise its publicly traded AI assets from 50% to 70-75%. This strategy is intended to provide greater flexibility in adjusting investments as the rapidly evolving AI landscape changes