Temasek warns AI and inflation are the biggest market risks for next year

One of Asia’s largest investors just named the two things most likely to ruin next year for global markets: artificial intelligence and inflation. Temasek’s investment chief, Rohit Sipahimalani, singled out the pair as the biggest risks ahead. The firm still plans to put a much bigger share of its money into AI, which is a bit like a lifeguard warning about rip currents while wading further out. What Temasek is actually worried about Sipahimalani’s concern centers on the wave of US capital expenditure flowing into AI infrastructure. Companies are spending heavily on the data centers, chips and power needed to run AI systems. His warning is about what happens if that spending fails to pay off. If the expected returns don’t show up, he cautioned, valuation pressure could trigger significant market disruption. He made the comments in discussions around the Temasek Review 2026, the firm’s annual look at its portfolio. Interviews in July 2026 put US capex front and center as a risk factor. Inflation is the second half of the warning, and the two risks are more connected than they look. Investors have noted that AI-driven demand for semiconductors and energy is feeding into higher prices...