Singapore's sovereign wealth fund: Chinese AI is lowering global AI costs and accelerating its adoption.

Author: Bao Yilong, Wall Street Insights

Singapore's sovereign wealth fund GIC stated that the rise of Chinese AI models will significantly reduce the cost of applying AI technology globally.

On July 23, Bryan Yeo, Chief Investment Officer of GIC, stated in an interview with the Financial Times that the emergence of large-scale Chinese language models such as DeepSeek and Kimi will drive down costs, thereby accelerating the widespread application of AI in 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.

OpenAI and Anthropic have both achieved valuations approaching $1 trillion this year, their logic built on the ability to continuously develop top-tier closed-source models.

Analysts believe that if low-cost Chinese open-source models become widespread, the rationale for the aforementioned high valuations will be questioned. GIC is betting on Anthropic and is bullish on Chinese AI. GIC has placed AI at the core of its investment strategy, investing billions of dollars in the field over the past few years. In February of this year, GIC led a $30 billion funding round for Anthropic. If the company behind Claude goes public as planned this year, GIC is expected to reap substantial returns. However, when pressed on whether Chinese open-source models would pose a threat to closed, cutting-edge US models like Anthropic and OpenAI, Bryan Yeo deliberately avoided giving a direct answer. Meanwhile, GIC expressed a positive view on the growth prospects of Chinese AI companies but remained cautious about investing in startups. Bryan Yeo pointed out 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 a recent low, GIC adjusts performance evaluation framework. GIC released its latest annual report on Friday, ending in March of this year. The report shows that the annualized return adjusted for inflation over the past two decades was 3.4%, the lowest level since 2020. GIC does not disclose single-year returns or the total size of its investment portfolio, but is widely considered one of the world's largest sovereign wealth funds. Regarding its performance evaluation framework, GIC adjusted its reporting methodology this year. Previously, GIC used a reference portfolio constructed based on the Singapore government's risk appetite as a benchmark, but stated that this reference portfolio should not be used as a benchmark for evaluating its returns. Starting next year, GIC will switch to publishing performance data for a new strategic portfolio based on government risk appetite and long-term return expectations, which will serve as its official performance benchmark. In terms of asset allocation trends, GIC is continuously increasing its investment in the Americas market. Since 2024, GIC's allocation to the Americas has increased from 44% to 53%, while its allocation to the Asia-Pacific region has decreased from 28% to 22%. Furthermore, GIC stated its plan to deploy $30 billion to hedge funds over the next three years. Over the past decade, GIC's investment in hedge funds has tripled, but specific exposure levels have not yet been disclosed.