Temasek keeps direct crypto investing off limits after FTX loss

Temasek is keeping direct cryptocurrency investment outside its mandate after writing down $275 million tied to failed exchange FTX in 2022. Nagi Hamiyeh, president of Temasek Global Investments, told CNBC on Wednesday that regulatory uncertainty remains a central reason for the Singapore state investor’s caution.

“We don’t have directly any, any investment in crypto,” Hamiyeh told CNBC’s Sri Jegarajah. He said he could not predict the future role of crypto in the wider economy, given that different regulatory outcomes could shape the sector.

The position marks a continued retreat from direct exposure to crypto companies after FTX’s collapse. Temasek’s 2022 writedown drew scrutiny in Singapore, where Lawrence Wong, then deputy prime minister and finance minister, described the loss as disappointing and harmful to the country’s reputation, according to CNBC.

Hamiyeh said Temasek is still assessing blockchain and related infrastructure for their use in the real economy. That approach separates investment in digital ledgers and operational systems from direct bets on crypto tokens or trading platforms. Blockchain can support record-keeping and transaction infrastructure, while crypto exchange exposure depends more directly on market activity, custody controls and the regulatory treatment of digital assets.

AI focus shifts toward adoption

On artificial intelligence, Hamiyeh told CNBC that Temasek favours adoption and the commercial ecosystem around AI over a narrower focus on frontier model development. He said not every use case requires the most advanced models, and that the investment case depends on applications and companies that use AI to strengthen their competitive position.

Hamiyeh said his longest-horizon AI focus is on physical deployment, including automation, robotics and improvements to industrial processes. Temasek aims to raise AI exposure to 15% of its portfolio by 2031 from 6% in the fiscal year ended March, according to CNBC.

He said the AI investment cycle remains early and could last for decades, while acknowledging that valuations in parts of the sector have moved ahead of underlying fundamentals. Temasek invests across the AI chain, including energy infrastructure and data centres. Hamiyeh told CNBC that long-term contracts with highly rated counterparties make risk in those areas “very, very minimal.”

Europe draws new capital

Hamiyeh said Europe has attracted about 12 billion euros, or $14 billion, of Temasek capital over the past two years. CNBC reported that this places the region behind only the United States in recent capital allocation.

He pointed to European strengths in luxury, consumer brands, the energy transition and family-owned industrial companies. Hamiyeh said Temasek looks beyond macroeconomic and political noise when assessing those sectors and can provide long-term capital.

In the Middle East, Hamiyeh said the region’s long-term transformation remains in place, while the effects of current conflict have yet to be fully understood. He told CNBC that Temasek would have to wait to assess the ramifications.

Defense exposure assessed case by case

Hamiyeh also said Temasek does not completely exclude the defense sector, despite its focus on sustainability and ethical investing. He told CNBC the firm considers each investment individually, including governance and any link to real-world conflict.

Temasek’s focus in the sector is mainly on dual-use technologies that can serve civilian purposes as well as military ones, according to Hamiyeh. He said biological and chemical weapons are categorically excluded, and that Temasek’s only exposure in the area is ST Engineering.

This story draws on original reporting from CNBC.