AI Almost Certainly Has Bubbles, Ken Griffin Says, Just Like the Internet Did
The Citadel founder wishes he had kept his Amazon stock from the dot-com boom.
Bloomberg Daybreak: US Edition · Starlink Ukraine Controversy; SpaceX and Tesla Study MergerKen Griffin, the billionaire founder of the investment firm Citadel, was speaking with Bloomberg's Danny Berger in New York when the conversation turned to artificial intelligence, the software that can learn and make decisions.
He was the most recent prominent investor to caution about an artificial intelligence bubble. Griffin argued that transformative technologies often attract waves of speculative investing.
“The big picture is there's almost certainly bubbles within this moment in time,” Griffin said. “And any radical transformation of our economy is generally intertwined with a bubble.”
His comments came as the Wall Street Journal was reporting that Anthropic, an artificial intelligence company, could spend $750 billion on computing power.
Griffin said the moment reminded him of 1999 and 2000, when investors used new metrics to value internet companies. Some of those companies, he said, had pretty fanciful business models.
On his own record from that period, he offered one regret. “I just wish I'd kept my Amazon stock from that moment in time,” he said.
He framed the larger lesson as a question, not a prediction. “And the internet, which was the great bubble, could it be more of a part of our daily life today than it is?”
Questions people ask
What does Griffin mean by a bubble?
He means investors are paying prices that assume faster growth or larger profits than many companies will deliver. Excitement about a real technology can lift both strong and weak businesses. When expectations reset, prices can fall sharply even if the technology succeeds.
Why does he point to Amazon?
Amazon went public in 1997, soared during the dot-com boom, then crashed before recovering over many years. An investor who sold during the excitement or the crash missed much larger long-term gains. Griffin uses it to show that a bubble and a transformative company can exist together.
What is Citadel?
Citadel is a large American investment firm founded by Ken Griffin in 1990, with a hedge fund and a separate securities business. It manages tens of billions of dollars and is known for using data and technology to trade. Griffin is one of the most closely watched investors on Wall Street.