The Pensions Regulator (TPR) has warned of potential hidden AI-related investment exposure as artificial intelligence becomes increasingly influential across global markets.
It pointed out that investment in AI-related activity is growing across global markets, with it more than doubling in 2025, rising by 127.5% year-on-year.
TOR said that brings new risks and opportunities for pension scheme investing, but because AI is increasingly embedded across sectors, even a diversified portfolio may have hidden exposure to common AI-related risks.
It has published guidance to help trustees identify and manage potential hidden AI-related investment exposure. TPR said it expects all schemes to maintain high standards of investment governance and manage risk over the short, medium, and long term.
It said its new guidance asks trustees to look across their whole portfolio, rather than considering individual funds or asset classes in isolation, giving practical guidance on how to manage potential risks and opportunities.
Ben Gunnee, executive director of market oversight at TPR, said: “We expect all schemes to maintain high standards of investment governance and manage risk over the short, medium and long term.
“That is why trustees should assess their AI-related exposure, test portfolio resilience and challenge advisers now to understand how market developments could affect their investments under different market conditions.”
TPR said it expects trustees to:
• assess total portfolio exposure, including direct and indirect AI-related exposure across asset classes
• use scenario analysis to test portfolio resilience under severe but plausible stressed market conditions
• review whether diversification would remain effective if correlations changed during a downturn
• challenge investment advisers and managers on how market developments could affect the scheme’s investments and objectives
• take proportionate action that reflects the scheme’s circumstances.