New York City’s $325 billion pension system has started rejecting private‑market artificial intelligence (AI) investments that it judges strong on their own merits because the fund is already heavily exposed to AI, Comptroller Mark Levine said on this week’s episode of Semafor.
Levine noted that diversifying a portfolio of that size is difficult under any circumstances because the city is invested across nearly every asset class and major economy. "But now so much of that, sector by sector, market by market, is AI," he said, calling the resulting level of "over‑concentration" a risk the fund is wary of.
He pointed to several indicators of that concentration: AI‑intensive companies represent nearly half of the S&P 500’s market value; 40% of U.S. high‑yield bonds sold this year are tied to AI‑heavy issuers; and one in every six dollars of blue‑chip corporate debt is held by such companies. According to Levine, other asset categories — from private credit to real estate to Asian equities — are increasingly effectively bets on data centers and related infrastructure.
At the same time, owning a large share of the AI buildout gives the fund some leverage with the tech CEOs who run those companies, and Levine expressed frustration with their behavior. He criticized the appearance of certain CEOs at former President Donald Trump’s state dinner for China in September, calling it "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 Levine raised is adopting formal AI standards for companies the fund owns, analogous to the pension system’s existing climate and labor policies. "We have a lot of fights to wage as shareholders," he said.
Reporting by Liz Hoffman and Rohan Goswami.
