Singapore state investor Temasek to focus on early adopters of AI in the U.S.; cautious on China

Singapore's Temasek said Tuesday most of its investment capital will keep going into the U.S. with the state investment company focusing on the early adopters of AI among traditional industries in the country.

While the U.S. overall appears to be expensive, the S&P equal weight index is at just 16 times earnings, which is below its long-term average, said Rohit Sipahimalani, Temasek's chief investment officer to CNBC.

Temasek, which did not give an exact breakdown of its exposure to U.S. assets, said Americas region constituted 22% of its portfolio.

The firm, whose portfolio value rose by nearly 2% to $389 billion Singapore dollars ($288 billion) in its financial year ended March, added that it was cautious on the Chinese market.

It pointed out that while China's government has a pro-growth stance that will aid its recovery, structural challenges remain in the economy, and without an increase in domestic demand, China's economy and inflation rates will continue to face downward pressure.

Temasek deputy CEO Chia Song Hwee said that the challenges that China has are very much on the demand side of the economy.

Companies that "drive domestic consumption or satisfy domestic consumption," such as in sectors like biotech, robotics and those in electrification and the electric vehicle value chain will be interesting, Chia said.

He added that while some of these businesses have export potential, due to geopolitical risks, the firm is really looking at companies that can solely rely on the domestic market and are less reliant on exporting to other countries.

Overall, Temasek will maintain a cautious approach and will continue to monitor government policies in the world's second largest economy, the state investor said. Chinese assets