Major institutional investors are adopting strategies reminiscent of the late-1990s internet-boom era to manage exposure to AI markets: rotating out of frothy mega-cap AI stocks into smaller, emerging winners while raising cash buffers. Amid surging valuations and a narrow leadership group, the hedge-fund community is prioritising diversification and liquidity, warning that a sharp correction, while not imminent, cannot be ruled out. The approach marks a subtle yet significant shift in allocation mindset despite popular enthusiasm around AI’s long-term prospects.