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One of the world’s biggest AI investors said the emergence of the latest Chinese models has significantly raised competition with US rivals and will cut the cost of adoption globally.
GIC, Singapore’s sovereign wealth fund, has put AI at the heart of its investment strategy, ploughing billions of dollars into the emerging technology over the past few years.
It led a $30bn funding round for Anthropic in February, positioning itself for a massive windfall if the company behind Claude follows through on plans to go public this year.
Yet the recent launch of large language models from Chinese labs such as Moonshot and DeepSeek has shown the gap between the US and China in developing state of the art AI is narrowing, and sparked speculation that American tech companies could be overvalued.
“It’s something that we have been looking deeply into,” Bryan Yeo, GIC’s chief investment officer, told the FT. “We see the emergence of more of these open-weight models, some of which are from China, and we think it’s actually a positive for the global AI ecosystem because it’s going to bring costs down.
“By bringing costs down, it [leads to] faster, broader . . . adoption of AI across many companies and industries. As a result, the use cases are only going to grow . . . exponentially.”
OpenAI and Anthropic have been valued at close to $1tn by investors this year on the basis that they can continue to develop world-beating models. The availability of cheaper Chinese models would cast doubt on those lofty valuations.
Yeo would not be drawn on whether the latest Chinese open-weight models — which are freely available to download — would pose a threat to US labs such as Anthropic and OpenAI, whose expensive frontier models remain closed.
The White House has claimed that recent leaps in performance from Chinese models have only been achieved by piggybacking on US models.
On Wednesday, President Donald Trump’s science adviser Michael Kratsios said Moonshot’s latest model was “distilled” from Anthropic’s flagship system. “Large-scale, covert industrial distillation aimed at stealing proprietary US technology and undermining American research is unacceptable,” he added.
GIC published its latest annual report for the 12 months to the end of March on Friday.
The Singaporean investor is believed to be one of the world’s biggest state investors, but does not disclose the size of its portfolio. It said the annual inflation-adjusted return over the past two decades was 3.4 per cent last year — the lowest rate since 2020. GIC does not reveal returns for individual years.
The investor — which has attracted scrutiny in Singapore over its investment returns — changed its reporting methodology this year. In previous years it has published the investment performance of a reference portfolio, based on the Singapore government’s risk appetite, but which GIC said its returns should not be judged against.
From next year, GIC will publish the performance of a new strategic portfolio based on the government’s risk appetite and long-term return expectations, which will act as a performance benchmark.
Established in 1981, GIC — or the Government of Singapore Investment Corporation — invests the country’s reserves internationally and is tasked with generating inflation-beating returns.
Since 2024, GIC’s exposure to the Americas has grown from 44 per cent of the portfolio to 53 per cent, while its Asia-Pacific exposure has dropped from 28 per cent to 22 per cent.
Yeo said that GIC saw strong growth in Chinese AI companies, but was cautious about investing in start-ups: “We have to scrutinise [the start-ups] a lot closer with regards to their capability to spend on R&D to grow the models.”
GIC also said it would look to deploy $30bn into hedge funds in the next three years, having tripled its investments in the funds over the past decade, although it did not disclose its current exposure.
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