Chris Hohn slashes $8bn Microsoft stake in warning over AI disruption

Sir Christopher Hohn’s hedge fund TCI has dumped almost all of its $8bn stake in US software giant Microsoft, telling investors that artificial intelligence poses a threat to the company’s dominant software products.

TCI, one of the world’s biggest and best-performing hedge funds, has held a large stake in the tech giant for much of the past decade, but slashed it from 10 per cent of its portfolio at the end of last year to just 1 per cent by the end of March, according to an investor letter seen by the FT.

“We reduced our investment in Microsoft because the rapid progress in AI introduces uncertainty over Microsoft’s competitive position in the future,” Hohn told investors in the letter.

“We are primarily concerned about Microsoft’s Office productivity software franchise, where AI could change established workflows and lead to the emergence of new productivity platforms, but we also see some risks in [cloud provider] Azure,” the letter added.

TCI declined to comment.

The sale marks a major moment for Hohn’s fund, which has ridden a nearly 400 per cent rise in the share price over the past nine years. It held a large stake in Microsoft almost continuously since the fourth quarter of 2017, although the stock briefly dropped out of its disclosures in 2023, regulatory filings show.

Microsoft’s stake in OpenAI has helped its shares ride Wall Street’s AI boom in recent years. But the stock is down 14 per cent so far in 2026 amid growing investor concerns over the company’s ability to commercialise its vast AI investments.

The letter also shows that TCI’s stake in Alphabet increased from 3 per cent to 5 per cent of the portfolio over the quarter, meaning it is now the fund’s biggest tech position.

Hohn’s TCI was the world’s most profitable hedge fund last year, generating $18.9bn in profits for investors and beating rivals such as Ken Griffin’s Citadel and Izzy Englander’s Millennium.

Hohn is highly unusual among hedge fund managers in that he concentrates his bets in a small number of companies — currently 15 — he sees as having powerful competitive positions that can keep rivals at bay. The vast majority of TCI’s large hedge fund rivals spread their bets across tens or hundreds of stocks.

Hohn also holds stocks for an average of nine years, far longer than most other hedge fund traders typically do, in an effort to benefit from the long-term growth of high-quality stocks. He is known for deploying activist tactics when he believes management is veering away from the company’s strengths or wasting capital.

Technology is a relatively small part of TCI’s portfolio compared with other funds, with his fund focused on infrastructure and aerospace companies in particular. Its top holding is GE Aerospace, which makes up 18 per cent of the portfolio, but he also holds large stakes in Visa, Moody’s and infrastructure company Ferrovial.