Ken Griffin did not mince words: the run in artificial intelligence "almost certainly" looks like a bubble. He said it in a conversation with Bloomberg's Dani Burger at Citadel's annual Future of Global Markets Conference in New York.
He linked big technological shifts to speculative episodes, saying, "Any radical transformation of our economy is generally intertwined with a bubble," and, "These bubbles, if we want to use that word, often coincide with these giant technological transformations." Recalling the dot-com era and its "fanciful" playbooks, he added, "The companies that are on the other side of that bubble are the market leaders for decades to come," before admitting, "I just wish I'd kept my Amazon stock in that moment."
Griffin said many executives still do not know the ultimate price tag for AI or how it will reshape growth. Anxiety among investors has intensified in recent weeks on fears that heavy up front AI investment will take longer than hoped to show up in profits and productivity.
"Corporate America has been very uneven in its ability to extract value from its AI models," he said, noting that finance teams staring at charges from Anthropic and OpenAI are asking, "Okay, we need to think about how to make sure we're getting productivity out of this."
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Anthropic is expected to move toward a U.S. stock-market listing in the coming weeks, a step that could rank among the largest initial public offerings and help the company fund work on new and better AI models. The money would back spending on chips, more data center capacity and talent.
According to the Wall Street Journal, Anthropic could deploy $750 billion toward additional computing power in the years ahead. Separately, Griffin said Anthropic's long term success will come down to proving to investors that its models are must-have tools across every industry.
Earlier this year in Davos, Griffin called AI "garbage." By May, at Stanford Business School, he said he was depressed by what AI could do. On Tuesday his tone turned notably more upbeat about innovation in the U.S., even as he flagged job disruption. "You're seeing the threat to white collar jobs playing out; as a business owner, you're seeing your competitive moats be filled in by bulldozers," he said. "At the same time, you're thinking that this will be a golden era for entrepreneurs."
The bottom line: the man behind the hedge fund Citadel and the market maker Citadel Securities is calling out bubble signs while pointing to lasting winners on the other side. For your portfolio, that means separating near term capex drag from long run adoption - bubbles pop, but market leaders born in them can compound for decades.
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