Hedge Funds
Citadel's Ken Griffin says investors are 'almost certainly' in an AI bubble
The Citadel founder said the AI boom shows signs of a bubble, but also said the technology is setting up a golden age for new businesses.
HedgeWeekly News Desk ·
Citadel founder Ken Griffin said on Tuesday that investors are "almost certainly" in an artificial intelligence bubble. He spoke in an interview at Citadel's Future of Global Markets conference in New York, which Bloomberg reported and other outlets then picked up.
Griffin did not dismiss the technology. According to the reports, he said that "any radical transformation of our economy is generally intertwined with a bubble," and that AI is laying the ground for a "golden age of entrepreneurial activity," with competitive moats across corporate America being filled in at "breathtaking rates." He compared the moment to the run-up to the dot-com crash, when some business models were fanciful while other companies lasted, and said he wished he had kept his Amazon shares.
His comments came as AI demand figures stayed strong. Super Micro put preliminary September-quarter revenue at $18.5 billion to $19.5 billion, far above its own guidance, and SpaceX said its AI business made up more than half of its roughly $14.6 billion in third-quarter revenue. Griffin's tone on AI has changed over the year. He sounded dismissive at Davos in January and unsettled by AI's capabilities when he spoke at Stanford's business school in May.
Why it matters: Griffin's warning is about prices and how the boom is financed, not a forecast that AI demand will fall away. For long/short equity books, his point about eroding moats matters as much as the bubble call itself, because it implies more pressure on incumbents as new entrants get cheaper tools. The next test comes when Meta reports after the US close on Wednesday, the first of the mega-cap tech companies. Investors will be looking for signs that AI spending is earning returns that support current valuations.