Singapore’s sovereign wealth fund: China’s AI lowers global AI costs and speeds up adoption

Author: Bao Yilong, Wall Street Insight

GIC, Singapore’s sovereign wealth fund, said that the rise of China’s AI models will significantly reduce the global cost of applying AI technology.

On July 23, Bryan Yeo, Chief Investment Officer of GIC, Singapore’s sovereign wealth fund, said in an interview with the Financial Times that the emergence of Chinese large language models such as DeepSeek and Kimi will drive costs down, thereby accelerating AI’s broad adoption across more enterprises and industries.

Bryan Yeo characterized this trend as a positive contribution to the global AI ecosystem. He emphasized:

Use cases will only grow exponentially.

This year, OpenAI and Anthropic have both already secured valuations close to $1 trillion, with logic built on the ability to continuously develop top-tier closed-source models. Analysts believe that if low-cost Chinese open-source models are widely adopted at scale, the rationale behind the aforementioned high valuations may come under question.

GIC bets on Anthropic, and is bullish on China’s AI

GIC has placed AI at the core of its investment strategy, having poured in tens of billions of dollars into the sector over the past few years.

In February this year, GIC led a funding round for Anthropic of up to $30 billion. If the company behind Claude completes a listing as planned this year, GIC stands to reap substantial returns.

However, when Bryan Yeo was asked whether Chinese open-source models would pose a threat to US closed frontier models such as Anthropic and OpenAI, he deliberately avoided taking a direct stance.

Meanwhile, GIC said it holds a positive view of the growth prospects for China’s AI companies, but remains cautious about investing in start-ups.

Bryan Yeo pointed out that GIC needs to take a “more rigorous look at the actual capabilities of these start-ups in R&D spending and model iteration.”

Annual returns hit a near-term low; GIC adjusts performance assessment framework

GIC released its latest annual report for the period ended March 31 of this year on Friday.

The report shows that over the past twenty years, its inflation-adjusted annualized return was 3.4%, the lowest level since 2020. GIC does not disclose single-year returns and does not publicly disclose the total size of its investment portfolio, but it is generally considered one of the world’s largest sovereign investment institutions.

In terms of its performance assessment framework, GIC adjusted its reporting methodology this year.

Previously, GIC used a reference group constructed based on the Singapore government’s risk appetite as a benchmark for comparison, but also stated that the reference portfolio should not be used as a benchmark for evaluating its returns.

Starting next year, GIC will instead publish the performance of new strategic portfolios built based on government risk appetite and long-term return expectations, and use these as its formal performance benchmarks.

From the perspective of asset allocation trends, GIC is steadily increasing its investments in the Americas. Since 2024, its allocation to the Americas has risen from 44% to 53%, while the Asia-Pacific allocation has fallen from 28% to 22%.

In addition, GIC said it plans to deploy $30 billion to hedge funds over the next three years. Over the past decade, GIC’s investment scale in hedge funds has grown to three times the original amount, but it has not disclosed the level of specific exposure at present.