Hedge funds are reassessing their positions in US technology stocks amid rising competition from China’s AI model, DeepSeek, according to a Goldman Sachs report dated Jan. 24.

The report shows a decline in hedge fund investments in AI-related sectors like data centers and EV charging infrastructure, continuing a year-long selloff in tech stocks.

Investor hesitation has grown as Nasdaq futures and tech shares declines, driven by concerns over US AI leadership despite significant investments like the US$19 billion Stargate venture by OpenAI and SoftBank.

Regulatory complexities and global competition are furthering fueling uncertainty, keeping overall sentiment remains cautious.