Singapore's sovereign wealth fund, GIC, has stated that the emergence of Chinese AI models will substantially lower the worldwide cost of deploying artificial intelligence technology.
On July 23rd, GIC Chief Investment Officer Bryan Yeo indicated to the Financial Times that the appearance of large language models from China, such as DeepSeek and Kimi, will foster a reduction in expenses, which in turn will accelerate the broad integration of AI across more businesses and sectors.
Yeo characterized this development as a positive contribution to the global AI ecosystem, emphasizing that "use cases will only grow exponentially."
Valuation Questions for US Giants
Both OpenAI and Anthropic have achieved valuations approaching one trillion dollars this year, a rationale built on their ability to continually develop cutting-edge, closed-source models. Analysts suggest that if low-cost, open-source Chinese models achieve widespread adoption, the justification for these high valuations could be challenged.
GIC's Bet on Anthropic and a Positive View of Chinese AI
GIC has placed AI at the heart of its investment strategy, committing billions of dollars to the sector over recent years. In February, the fund led a financing round for Anthropic valued at up to 30 billion dollars. Should the company behind Claude proceed with its planned public listing this year, GIC stands to generate significant returns.
However, when pressed on whether Chinese open-source models pose a threat to US closed-source frontier models from companies like Anthropic and OpenAI, Bryan Yeo deliberately avoided a direct response.
Concurrently, GIC expressed a positive outlook on the growth prospects for Chinese AI companies, but maintains caution when investing in startups. Yeo noted that GIC needs to "more rigorously examine the actual capabilities of these startups in terms of R&D investment and model iteration."
Annual Returns Hit Recent Lows, GIC Revamps Performance Framework
On Friday, GIC released its latest annual report for the period ending March 31st. The report revealed a 20-year inflation-adjusted annualized return of 3.4%, the lowest level since 2020. GIC does not disclose single-year returns or its total portfolio size, but it is widely regarded as one of the world's largest sovereign investment institutions.
In terms of its performance evaluation framework, GIC has adjusted its reporting methodology this year. Previously, GIC used a reference portfolio based on the Singapore government's risk preferences as a benchmark, while simultaneously stating that this reference portfolio should not be used as a yardstick for assessing its returns.
Starting next year, GIC will instead publish performance based on a new strategic portfolio constructed using the government's risk preferences and long-term return expectations, which will serve as its official performance benchmark.
Regarding asset allocation trends, GIC is consistently increasing its investment in the Americas. Since 2024, GIC's allocation to the Americas has risen from 44% to 53%, while its allocation to the Asia-Pacific region has decreased from 28% to 22%.
Additionally, GIC announced plans to deploy 30 billion dollars into hedge funds over the next three years. Over the past decade, GIC has tripled its investment in hedge funds, though it does not currently disclose specific exposure levels.