The AI trade could rapidly unravel – and one hedge fund is preparing for the fallout

The AI boom is turbo-charging technology stocks, pushing the S & P 500 , the Nasdaq and Dow Jones to fresh record highs. But Karim Moussalem, chief investment officer of equities at Selwood Asset Management, sees "enormous risks" on the horizon for the AI trade which could rapidly unravel — and he is positioning his fund for the fallout. "The AI trade is beginning to resemble one of the great speculative manias of market history," Moussalem, who runs a market-neutral equity strategy at the London-based hedge fund, said in a post on LinkedIn . "For me, there is no denying that we are in the midst of a bubble, and a total retail driven frenzy." Speaking to CNBC's "Squawk Box Europe" on Thursday, Moussalem said AI hyperscalers were in a race "nobody wants to lose," with the power to spend bil