Hedge Funds Rapidly Exit Tech Stocks Ahead of U.S. Tariff Deadline, Goldman Sachs Reports

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Hedge funds have been unloading tech stocks at their fastest pace in six months, marking the largest tech-sector exodus in five years, according to a Goldman Sachs note released Friday and seen by Reuters on Monday. The move comes just ahead of the April 2 tariff deadline announced by U.S. President Donald Trump, which has sparked widespread market uncertainty and fears of an economic downturn.

According to Goldman Sachs’ prime brokerage desk — which tracks hedge fund activity — the information technology sector, including the “Magnificent-7” tech stocks, was “by far the most net sold” last week. Both long positions (bets that prices will rise) and short positions (bets on a decline) in tech stocks were rapidly closed, reflecting a strong pullback across the board.

Analysts at Edmond de Rothschild linked this abrupt sell-off to the anticipated tariffs on copper and other raw materials, which are expected to weigh heavily on tech manufacturers and AI-related hardware producers.

A separate note from Morgan Stanley revealed that hedge funds are increasingly betting against some of the sector’s biggest names. Nvidia, AMD, and Tesla were identified as the top three short positions as of Wednesday.

Goldman said that around 75% of last week’s hedge fund selling activity was concentrated in U.S. tech stocks, particularly those connected to AI hardware development. Total hedge fund exposure to tech is now at a five-year low, despite heavy buying just a few weeks ago in mid-March.

Another dataset from JPMorgan noted a reversal of positions by hedge funds last week, possibly influenced by strong retail investor activity. This surge in retail buying may have triggered a short squeeze, forcing some bearish investors to unwind their positions as stock prices climbed unexpectedly.

“With the tariff news, it was interesting that hedge fund flows and positioning might suggest they’re already somewhat prepared—at least in terms of key areas that have been in focus,” said JPMorgan in its client note.

As the April 2 deadline looms, hedge funds appear to be bracing for volatility, shifting away from one of the market’s most lucrative sectors in recent years.

Zhipu AI Launches Free AI Agent, Heats Up China’s Tech Race

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Chinese AI startup Zhipu AI has unveiled a free-to-use AI agent named AutoGLM Rumination, further intensifying the fast-growing artificial intelligence competition within China’s tech industry. The announcement was made by CEO Zhang Peng during a launch event in Beijing on Monday.

AutoGLM Rumination is capable of executing complex tasks such as deep research, web browsing, travel planning, and writing research reports. It is powered by Zhipu’s proprietary models — the reasoning model GLM-Z1-Air and the foundation model GLM-4-Air-0414. According to the company, GLM-Z1-Air rivals DeepSeek’s R1 in output quality but operates up to eight times faster, while demanding significantly less computing power — just one-thirtieth of the resources.

AI agents like AutoGLM are designed to autonomously perform tasks and make decisions, and their popularity is rapidly rising as firms strive to commercialize AI tools in practical, real-world settings. The move by Zhipu comes on the heels of Manus launching what it claimed was the world’s first general AI agent — albeit at a premium price of up to $199 per month. In contrast, Zhipu is offering its agent completely free via its official website and mobile app.

Founded in 2019 as a spinoff from a Tsinghua University laboratory, Zhipu AI has rapidly gained momentum and recognition. Its GLM series of large language models, particularly GLM4, are reported by the company to outperform OpenAI’s GPT-4 on several benchmarks.

This latest product launch is buoyed by a wave of government-backed support, with the company securing three rounds of funding in one month. The most recent came from the city of Chengdu, which invested 300 million yuan ($41.5 million) into Zhipu.

As the AI ecosystem in China accelerates, Zhipu’s free access model could prove disruptive — democratizing access to advanced AI tools while pushing other domestic rivals and global players to adjust their pricing and strategies.

TSMC Reinforces Commitment to Taiwan with New Domestic Fab Amid Global Expansion

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Taiwan Semiconductor Manufacturing Company (TSMC) reaffirmed its dedication to its home base with the opening of a new chip manufacturing facility in Kaohsiung, Taiwan. The factory, which will produce the company’s most advanced chips using 2nm technology, is expected to create 7,000 tech jobs on the island. This announcement comes amid concerns that TSMC’s significant investment in the United States could dilute its domestic presence.

TSMC’s executive vice president, Y.P. Chyn, made the remarks during a ceremony at the new fab, highlighting the company’s ongoing commitment to Taiwan even as it expands globally. The new facility is slated to begin volume production of 2nm wafers in the latter half of this year, according to the company’s schedule.

Despite its $100 billion investment plan in the U.S., TSMC and the Taiwanese government have both emphasized that a substantial portion of the company’s production will remain in Taiwan. TSMC, often called Taiwan’s “sacred mountain protecting the country,” plays a pivotal role in Taiwan’s economy, and the company’s officials reassured that Taiwan will continue to be at the heart of its operations.

While Taiwan’s Premier Cho Jung-tai expressed gratitude for TSMC’s assurances, noting that the company will always remain a “national team,” the company has also made clear that it intends to meet the growing demand of global customers, which has driven its expansion.

TSMC’s growing presence in the U.S. follows pressure from U.S. President Donald Trump, who has repeatedly criticized Taiwan’s semiconductor dominance and called for more manufacturing to return to the U.S. The concerns over potential tariff impositions highlight the delicate balance TSMC must strike as it manages its global footprint while maintaining its critical role in Taiwan’s economy.