Temasek International CIO warns of market risks from US capital spending surge

When one of Asia’s most powerful sovereign wealth funds starts waving caution flags about US spending, the rest of the market tends to pay attention. Rohit Sipahimalani, Chief Investment Officer of Temasek International, used a July 8 interview to warn that surging US capital expenditure, particularly in artificial intelligence infrastructure, could pose meaningful risks for global markets.

The timing was not accidental. Sipahimalani’s remarks arrived alongside the release of Temasek’s fiscal year 2026 results, which showed the fund’s net portfolio value hitting a record S$518 billion (roughly US$401 billion) as of March 31, 2026. That represents a year-on-year increase of S$49 billion, or 10.5%, up from S$469 billion.

The capex problem, explained

Sipahimalani’s concern centers on whether the current wave of US capital expenditure, heavily concentrated in AI-related infrastructure, can generate returns that justify the investment. If companies are pouring billions into AI infrastructure and the revenue from AI products doesn’t materialize fast enough, you get an overhang. Asset valuations that were priced for perfection suddenly look expensive.

Record returns, cautious posture

What makes Sipahimalani’s warning particularly interesting is that Temasek just posted what are, by any measure, excellent results. The S$49 billion increase in portfolio value was driven by gains from Singapore-listed holdings and strategic divestments, suggesting the fund has been actively managing its exposure rather than simply riding a rising tide.

Sipahimalani emphasized the firm’s careful approach to new investments, citing geopolitical uncertainties including US-China tensions and instability in Iran as factors demanding vigilance.

What’s notably absent: crypto

Perhaps the most telling detail from the interview and Temasek’s broader portfolio review is what wasn’t discussed. No mention of crypto assets, digital tokens, or blockchain-related investments appeared in any of the firm’s public commentary. Temasek has indicated no new crypto exposure as it continues prioritizing traditional asset classes amid macroeconomic uncertainty.

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