Colonial First State Superannuation, managing A$179 billion in retirement assets, is actively reconsidering its exposure to US technology stocks amid growing concerns about artificial intelligence spending. Kelly Power, the fund's CEO, revealed the strategy shift at the Australian Financial Review Business Summit in Sydney, signaling potential reallocation away from major US tech companies.

Australia's A$4.5 trillion pension system has substantial investments in the so-called Magnificent Seven companies, including Amazon.com Inc., Microsoft Corp., and Alphabet Inc. These tech giants have faced market pressure as investors question whether their massive capital expenditures on AI infrastructure will deliver adequate returns. The reassessment comes as US technology stocks experience volatility.

Power's comments reflect broader institutional investor concerns about AI-driven valuations in the tech sector. While some funds like UniSuper believe the recent selloff in technology stocks may be overdone, Colonial First State's strategic review suggests a more cautious approach. The potential reallocation could signal a significant shift in how Australian pension funds view US tech investments amid uncertainty about AI's financial returns.