The companies that invest have products (or have other investments with products) that have a strong market - they end up increasing the price of products to cover the purchase of acquisitions and losses. This results in inflation and worsening wealth distribution.

The article is quite clear on whose money it is - "Google, Amazon, Nvidia, Intel, AMD, Qualcomm, IBM, Salesforce and Sound Ventures".

For at least half of them, it might make sense to simply sponsor accelerating worldwide new AI product development because those new products will increase sales of their hardware and services; pitch in $20m together with others to support efforts like Huggingface, while expecting that their tools will indirectly cause an extra $1b sales for you in the next few years.

>Have pension funds stopped chasing VC funds etc?

Yes, they have. Higher bond yields (compared to 0% three years ago) is causing pension funds to shift their allocation away from "alternative" investments (vc & pe), so it has become harder to raise a new VC fund these days.