Calpers Pulls Back From Big Tech as AI Jitters Deepen Neocloud Sell-Off

The California Public Employees’ Retirement System, the largest U.S. pension fund, is reducing its exposure to major technology stocks amid growing investor concerns over artificial intelligence spending and valuations. Calpers’ move comes as a sell-off in so-called neocloud companies—firms that provide cloud and AI infrastructure—intensifies, reflecting broader market anxiety about the returns on massive AI investments. The fund is shifting capital toward private equity, seeking more stable long-term returns. This strategic pivot underscores a key debate: whether the AI boom will deliver profits or is inflating a bubble. With tech stocks under pressure, Calpers’ reallocation may signal a broader institutional retreat from high-flying AI names. Investors will watch whether other large funds follow suit, potentially reshaping market dynamics in the months ahead.