A client sent me this. No comment, just the headline: Ken Griffin thinks AI is in a bubble.
I know why he sent it. Billionaire hedge fund founder says bubble, so maybe it is time to run for the hills. It is a fair question. The answer is more interesting than the headline.
The market barely moved. That tells you something too. Read past the headline. Griffin is not calling AI a fad. He is saying the money has arrived before the profits. Companies are spending enormous sums on chips and data centres. Nobody knows yet how much of it comes back as earnings.
He compared GPUs to airline seats. An empty seat on a flight that has already left earns nothing, ever. Build too much capacity and prices fall. Profits follow them down.
Now the other half. Griffin believes AI is real. Every radical change to the economy, he said, comes wrapped in a bubble. The dot-com bust buried hundreds of companies. Amazon survived. He admitted he wishes he had kept the stock.
Bubbles and revolutions are not opposites. They travel together. The railways changed the world and ruined a generation of investors who financed them.
So the question is not whether AI will matter. It will. The question is what you are paying for it, and whether you own the company still standing when the music stops.