Global Pension Funds Concerned About Increasing Risks of AI Investments

As AI investments rapidly spread, global pension funds and sovereign wealth funds are becoming increasingly concerned. The New York City Retirement System (NYCRS), which rejected investments in private equity funds with high exposure to AI-related companies, stated that its existing portfolio already contains extensive AI-related risks. Goldman Sachs estimates that companies related to AI infrastructure account for about 40% of the market capitalization of the S&P 500. Nearly half of the investment-grade corporate bonds issued this year are related to AI, and 87% of venture capital investments are concentrated in the AI sector. According to analysis by JP Morgan Chase, portfolios have shown a significant correlation with AI-related risk factors in recent years. Institutional investors feel pressured to reduce AI investments, as the returns on AI-related stocks significantly outperform the market average. The Los Angeles County Employees Retirement Association (LACERA) estimates that 8% to 19% of its total investment assets are related to AI. A total portfolio approach (TPA) that examines risk factors across the entire portfolio is gaining attention instead of traditional methods.

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