Citadel’s Ken Griffin says investors are “almost certainly” in the midst of an AI bubble

Billionaire Ken Griffin said investors are “almost certainly” witnessing an artificial intelligence bubble, as companies struggle to determine how much to invest in the technology and how it will reshape the economy.

Concerns about the sustainability of the AI boom have intensified in recent weeks, with investors questioning whether massive upfront investments will generate the expected productivity gains and profits quickly enough.

“Corporate America has been very uneven in its ability to extract value from its AI models,” Griffin said in an interview Tuesday at the Future of Global Markets Conference in New York. “I think all of Corporate America is looking at their bills from Anthropic and OpenAI and going, ‘Okay, we need to think about how to make sure we’re getting productivity out of this.”

The spending required to develop AI models is also drawing attention to Anthropic, one of the leading AI developers, which is expected to publicly file paperwork for a Wall Street debut in the coming weeks. The listing could rank among the largest initial public offerings ever, helping the company raise capital for chips, data centers and talent.

The Wall Street Journal reported Tuesday that Anthropic could spend $750B on additional computing power in the coming years. Griffin said the company’s long-term success will depend on demonstrating that its models are indispensable across industries.

“Any radical transformation of our economy is generally intertwined with a bubble,” Griffin said. “These bubbles, if we want to use that word, often coincide with these giant technological transformations.”

Griffin’s assessment marks a shift from some of his earlier comments on AI. Speaking in Davos earlier this year, he called the technology garbage, and in May, he told an audience at Stanford Business School that he was depressed by what AI could achieve.

On Tuesday, however, Griffin struck a more optimistic tone, arguing that AI could usher in a new wave of business creation in the U.S., even as it threatens established companies and white-collar jobs.

“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,” Griffin said. “At the same time, you’re thinking that this will be a golden era for entrepreneurs.”

Griffin, whose business empire includes hedge fund Citadel and market-maker Citadel Securities, also drew parallels with the period before the dot-com crash, when investors poured money into companies built around “fanciful” business models.

Despite the risk of a bubble, he noted that the companies that survive such downturns can go on to dominate their industries for years.

“The companies that are on the other side of that bubble are the market leaders for decades to come,” he said. “I just wish I’d kept my Amazon stock in that moment.”

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