Australian superannuation funds are increasingly investing in artificial intelligence and technology stocks, with experts estimating that the average balanced portfolio now holds about 12% in AI-related companies. This exposure includes holdings in Elon Musk's SpaceX, which recently debuted on the US stock exchange, as well as other major tech firms like Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta, and Tesla.
How super funds invest in tech
According to the Association of Superannuation Funds of Australia (Asfa), many portfolios are invested in SpaceX due to the fund's strategy of tracking global benchmark indices heavily weighted toward the US market. Asfa CEO Mary Delahunty explained that super funds invest a large proportion of members' savings overseas to access risk-adjusted returns not available locally. "When Australian super funds invest in international share markets, they often track global benchmark indices that are heavily weighted towards the US because it is the world's largest capital market," she said. This approach, combined with diversified portfolios, has driven average returns in balanced funds of about 10% per year over the past three years.
Individual exposure remains modest
Despite the large-scale investments, individual member exposure to specific companies like SpaceX is relatively small. Asfa estimated that the average Australian super fund member's exposure to SpaceX is about $50. Australian Retirement Trust (ART), one of the country's three biggest super funds, reported an exposure of about $15 per member. ART's head of investment strategy, Andrew Fisher, noted that the fund focuses on generating the best returns for members. "New money doesn't get created," he said. "One of the areas … that we're going to be watching closely is if all this money goes to SpaceX or Anthropic or OpenAI, where does it come from?"
Ethical and risk concerns
The growing concentration in tech stocks raises ethical questions. Dale Gillham, chief investment analyst at Wealth Within, highlighted issues related to privacy, copyright infringement, labour displacement, and the enormous energy requirements of AI. He noted that super funds may promote ESG policies while still holding shares in companies that members might consider unethical. "Most Australians do not choose to invest in AI directly, yet their retirement savings are increasingly exposed to a small group of US technology companies," Gillham said. He also warned of financial risk, pointing out that while the local tech sector makes up just 3% of the ASX, a third of the US market is in tech stocks. A fall in US tech giants could significantly impact super balances.
Calls for responsible AI investment
Warwick Peel, a responsible AI expert and partner at Amrop Carmichael Fisher, described AI exposure as "completely unavoidable" and urged super funds to deeply consider what constitutes responsible AI. Peel, who is part of a working group on an Asia-Pacific framework for AI investment, expressed optimism that the sector could generate environmental benefits and social dividends. "It's going to get worse before it gets better," he said. "However, I'm an optimist and I honestly believe once we point these machines in the right direction, we'll be better placed to actually achieve … pro-social AI."
