Temasek Identifies Risks for Global Markets in 2027

Temasek's Head of Investments, Rohit Sipahimalani, identified the sell-off in the artificial intelligence (AI) market as the biggest risk for global markets in 2027. According to him, although this sell-off does not seem imminent, markets may face unforeseen fluctuations in 2027. “The unwinding of AI trading – is the biggest risk… We do not see it happening soon. But will there be fluctuations in 2027? Possibly, yes,” – noted Sipahimalani at the Milken Asia Summit 2026 in Singapore.

Investment company Temasek, whose assets amount to 518 billion Singapore dollars (405 billion US dollars), plans to increase its share of investments in AI from 6% to 15% by 2031. Sipahimalani stated that about half of its assets are currently in public markets, and he hopes to increase this share to 70–75%. This will give Temasek greater flexibility to maneuver in the volatile AI market. As the second major risk, he pointed to inflation and the interest rate environment. According to him, such factors are already putting pressure on the bond market, and “Inflation – is a risk, along with what is happening in the interest rate environment; this means there is likely a risk of some breaking point in the stock market.” He combined these two risks as key for 2027.

According to Bloomberg data, global bonds have already faced a decline due to rising energy costs and government borrowing, creating expectations of further interest rate hikes. Sipahimalani emphasizes that the current volatility in the stock market could worsen if inflationary pressures persist. His warnings align with the views of other prominent investors, such as Ray Dalio, who described the AI boom as a classic bubble nearing a breaking point. Despite the warnings, the stock market continues to show strong growth, including the S&P 500 and Nasdaq 100 indices, reaching record highs on optimism about earnings from the technology sector. However, the impact of rising interest rates on stocks remains a significant concern, as such rates can make borrowing more difficult for companies, making them less profitable in the future. Sipahimalani noted that in 2027, markets could be under pressure if ongoing economic changes are not adequately accounted for and analyzed.