Navigating Sovereign Wealth Strategy In The Era Of AI

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Eric Wilmes (0:59)

There is clearly a focus on using AI for efficiency.

But the real focus, the real value add, is if you can drive new revenue, if you can create new products and services, if you can do things to delight your clients. This is the kind of return that compounds and that is genuinely what most of those firms are looking for, and that's clearly what we're looking for in new investments.

Maneet Ahuja (1:22)

Welcome, I'm Maneet Ahuja, Editor-at-Large at Forbes and Founder of Iconoclast, and we're here at Forbes on 5th.

GIC, Singapore Sovereign Wealth Fund, has been investing in America for more than four decades. Through every boom, every bust, every cycle. This year, it led the largest private funding round in history for Anthropic. My guest runs the Americas for GIC, Eric Wilmes. Thank you so much for joining us on Iconoclast.

Eric Wilmes (1:50)

Hi, Maneet. It's great to be here.

Maneet Ahuja (1:51)

It's great to have you here. So I want to start with the economy and the big picture, because you see it from a vantage point very few people have.

GIC surveys roughly 100 portfolio company CEOs every quarter. 60% expected a recession, 75% expected their businesses to perform very well. How do you underwrite a deal inside that gap? Tell me a big picture of what you're seeing now. Sure.

Eric Wilmes (2:18)

Thank you again. So it's great to be here. So just as a little bit of background, as your viewers may know, GIC is Singapore's sovereign wealth fund, which means you should think of us almost as like a manager for the savings bank for the country. So we help support things like health care or schools in the country, or serve as a rainy day fund for Singapore in times like COVID.

We invest in everything. So the Americas are our biggest market. So it's 53% of the portfolio. And we'll invest in everything from infrastructure and real estate all the way through public equities and venture capital. So you're right, we get a lot of signals from the portfolio. One of the signals that we get comes from our private equity team. So we interview quarterly 100 of our CEOs.

And you're right, they give us feedback that gives us a sense what's going on in their business, how they're feeling perhaps about policy decisions, how they're feeling about employment or artificial intelligence. In our most recent reading, things have actually looked up. So I think the number you're referring to was from perhaps a year ago. This is coming out of the tariff tantrum in the markets.

Maneet Ahuja (3:18)

Oh, I like that tariff tantrum.

Eric Wilmes (3:20)

And so CEOs were concerned. Their optimism has increased quite a bit. So apples to apples, our CEOs think maybe there's a 6% chance of a recession in the next year. So really, they're feeling a lot more optimistic about their businesses. And you can see it in a number of different areas. So from an inflation standpoint, they had thought inflation might be heading towards 5%. They've now come in at 3%.

In terms of employment, two-thirds of them are looking at adding people in the next year.

And probably most strikingly, the biggest consensus was around AI. So 94% are implementing AI efficiencies in their businesses, and 88% are trying to develop AI revenue, so AI products in the business. And half of them are already generating revenue from AI. And this is one of those things we should come back to, but I do think is really telling AI is not just about efficiency, it's also about building your business and growing the top.

Maneet Ahuja (4:13)

So I really like that juxtaposition though, because you're saying that companies are doing more hiring, and I think that's a part of the underlying fear a lot with AI, which we'll get into deeper as we go throughout the interview. But that's so interesting to hear, is that the CEOs are more optimistic, there is hiring going on, and at the same time investing alongside AI.