Hedge funds across Asia have suffered significant losses as a sharp selloff in artificial intelligence stocks triggers margin calls, forced liquidations and renewed concerns overcrowded technology positions, according to a report by Bloomberg.

Hong Kong-based hedge fund Aspex lost 16% in October, while Goldman Sachs prime brokerage estimates indicate that Asia-focused equity hedge funds declined 9.4% during the month, reducing their year-to-date gains to 14%. China-focused stock pickers suffered even steeper losses of 11%, while some Chinese long-only quantitative strategies lost more than 10%, erasing their gains for the year.

Other managers also reported losses, with Valliance Asset Management's Long-Short Master Fund declining 6.7% in October and CloudAlpha Capital Management's $2.8bn Singularity Master Fund falling nearly 3%. The broader market turmoil has also affected major multistrategy hedge funds including Millennium Management and ExodusPoint Capital Management.

Selling pressure intensified on Friday as concerns over tighter US regulation of AI and a potential slowdown in data centre investment weighed on Asian equities. The MSCI Asia Pacific Index fell as much as 5.3%, while South Korea's Kospi plunged 8.8%, triggering a trading halt. The declines followed a US technology selloff that wiped $2.3tn from the Nasdaq 100's market capitalisation on Thursday.

The reversal has placed particular pressure on leveraged investors, with wealthy individuals in Hong Kong and Taiwan facing margin calls and potential losses on structured products. Market participants warned that concentrated holdings, options-related trading and forced deleveraging were amplifying declines as investors rushed to reduce exposure.

However, some hedge funds have benefited from the volatility. Chris McGuire, who manages a Japanese convertible bond arbitrage strategy at Eagle's View Capital Management, said his fund had gained an estimated 2.5% or more in November, highlighting the divergence in performance between strategies during the market disruption.

The latest losses have raised concerns that October's hedge fund deleveraging is extending into November, with analysts suggesting that forced position unwinds, rather than a fundamental reassessment of AI's long-term prospects, may be driving the severity of the selloff.