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Zhu Yu, Jin Shi Data
Investors who are convinced that the artificial intelligence (AI) craze has gone too far should be prepared for what is about to hit the market.Greg Jensen, co-chief investment officer of Bridgewater Associates, said in a recent interview.
Greg Jensen claims that he has been working on machine learning for more than ten years.He said the market still hasn’t grasped how transformative the technology is, nor the scale of capital that’s about to pour into it.
“The bubble is ahead of us, not behind us,” he told Norges Bank Investment Management CEO Nicolai Tangen in an interview on Wednesday’s “In Good Company” podcast.
While some business leaders and investors like Bill Gates and Michael Burry believe the AI boom is similar to the dot-com era,But Jensen said the world hasn’t even entered the speculative phase yet.
Instead, he said, we’re still in a phase where “people simply don’t know what’s coming to them” and most investors don’t yet understand how AI will fundamentally reshape markets, geopolitics and economic growth.
AI leaders believe it’s a matter of “survival”
Jensen said that the difference between this cycle and previous technology manias is that artificial intelligence leaders, including Musk, OpenAI CEO Altman and Google, all believe that this is a matter of “survival.”
They “believe that control of the Earth and the universe is just a few years away,” he said, adding that “they are not driven by the normal profit incentives of a typical cycle.”
This mindset means capital spending won’t slow down just because valuations look too high or financing costs become more expensive.”This money has to be spent,” he said.
This triggered what Jensen calls a “resource scramble phase” that the tech industry has never experienced.
The scramble for power, data center land and advanced chips has created bottlenecks.
Talent is also another bottleneck, he added.Jensen estimates that globally,There are “fewer than a thousand” truly top AI scientists, and fierce competition for them is slowing scientific progress.
Tangen said the market now looks like professional sports: “It’s like football players and the transfer window,” to which Jansen replied: “Exactly.”
Competition for resources has distorted markets
Despite the growing impact of artificial intelligence on markets, investors are still too narrowly focused on the current winners, Jensen said.
Excluding stocks of those big AI companies, U.S. stocks have begun to lag behind the rest of the world — a sign that the industry is masking a deeper economic shift, he said.
At the same time, AI-related capital spending is now large enough to affect macroeconomic indicators: Jensen estimates that about 1 percentage point of U.S. gross domestic product growth this year will be due to AI investment alone.
All of this, he said, is just the beginning.
Jensen said,The world is now entering “a more dangerous phase” of the artificial intelligence cycle – characterized by scarce resources, accelerated spending and increased competition – and investors remain unprepared for what happens next.
