New York City's $325 Billion Pension Fund Turns Down AI Deals Over Concentration Risk

Speaking on a Semafor podcast this week, Levine said a fund that size has to be in every asset class and is invested in every major economy, which makes it hard to diversify. "But now so much of that, sector by sector, market by market, is AI," he said. He called the resulting "over-concentration" "a risk that we're leery of."

Large public pension systems supply much of the money behind the private equity, venture and private credit funds that are financing AI companies and data centres. If allocators of this size begin limiting their AI exposure across whole portfolios, the managers raising money for the buildout will have fewer buyers to approach.

Semafor's reporters put numbers on how hard the exposure is to avoid. AI-heavy companies make up almost half of the S&P 500's market value, they wrote, and account for 40% of US high-yield bonds sold this year and one in every six dollars of blue-chip corporate debt. They argued that holdings outside the technology sector, from private credit to real estate to Asian equities, increasingly depend on data centres.

Levine, who acts as the city's chief financial officer, said the fund's large holdings also give it leverage over the technology executives who run its portfolio companies. He criticised chief executives who attended President Donald Trump's state dinner for China in September, calling their appearance "a national embarrassment" and saying they had "kissed the ring" of a president he described as "a massive threat to pulling off the AGI transition safely."

One option he raised is a set of formal AI standards for companies the fund owns, similar to its existing climate and labour policies. "We have a lot of fights to wage as shareholders," he said.

Levine has already pressed one AI company directly. In October he wrote an open letter to Anthropic chief executive Dario Amodei asking the company to pause its initial public offering until it had addressed safety concerns, the trade publication AI-CIO reported. That report put the pension system's assets at $330 billion. Anthropic did not pause, and opened its IPO roadshow this week ahead of a planned November 19 listing.

The Semafor excerpt does not name the deals the city turned down, say how large they were, or say when the fund might adopt AI standards for its holdings.