Re: Reply to me as if I'm five, and be gentle.
I am not a Finance guy, but Yes, pension funds have invested in AI in a number of ways..
Firstly "Index Funds" which invest in (as the link says) "a broad range of assets that mirror a specific stock market index, like the UK FTSE 100" or er, NASDAQ. That means your pension fund will automatically buy shares in companies like Oracle, SpaceX (aka xAI), and CoreWeave, alongside Microsoft, Meta, Amazon, Alphabet (aka Google) etc. And OpenAI and Anthropic too if they are ever allowed to go public.
Secondly, these companies aren't just going to let down their shareholders - they also issue bonds, which are "IOUs" supposed to be repaid in a fixed time e.g. 10 years. These IOUs can be sold onwards though, so their "value" (determined by what someone might pay for an IOU from Oracle, to pay 100 million dollars in 10 years time) can diminish (because of the changing estimates of probability that Oracle will still be around in 10 years and able to pay up). Bonds are bought by institutions - as my second link says: "HSBC, Bank of America, Citigroup, Deutsche Bank, Goldman Sachs and JP Morgan were active bookrunners on the latest [Oracle, $25Bn] bond deal.". These are "high street banks" which operate people's personal bank accounts, savings and pension funds.
If the $25Bn of bonds that Oracle sold later turn out to be worth as much as used toilet paper, these banks are in big trouble. And it is looking dodgy, as these bondholders (i.e. banks) have already sued Oracle, for causing the value of those bonds to drop, because they have wasted so much money on AI that "the markets" (i.e. people who DeutscheBank or HSBC might want to sell their Oracle bonds to) no longer believe that Oracle will be able to pay up, and so aren't buying them. Suing the issuer of your bonds seems like a pretty extreme step to me, because it will naturally decrease the ability of Oracle to be able to pay back the bonds, which means they could lose even more of their value. But maybe it is a way to push ahead of the shareholders in the queue to get the money out of Oracle when it eventually implodes.
And thirdly - the real reason for the 2008 crash wasn't just that banks had lost money on subprime mortgages, it was because those banks were in "leveraged positions", meaning that they had lent out way more money than they actually held in deposits. This is legal, but there is a minimum ratio of "real money" that a bank must hold. Since 2008 this "leverage ratio" was tightened in most places, meaning that banks must have a higher proportion of "real money" compared to "money that is supposed to be paid to them in the future", but some of these limits were relaxed last year, meaning that banks can once again put themselves in 2008-like precarious lending positions.
Stocks (as far as I am aware) are treated as "assets", so if a bank holds a bunch of tech stocks and their values plummet, then they can suddenly find themselves at the leverage ratio limit at which point the regulator may step in and tell them to suspend trading.
As I say, I am not an economist or accountant, but I did read a great book in 2010 called "Wh00ps! Or Why Everyone Owes Everyone and No One Can Pay" by John Lanchester. I highly recommend it to any gifted five-year-old ;)