Bridgewater Executive Warns: AI Frenzy Yet to Fully Erupt
According to Greg Jensen, co-chief investment officer at Bridgewater Associates, the artificial intelligence (AI) market is on the brink of a massive upheaval. In a recent podcast with Nicolai Tangen, CEO of Norges Bank Investment Management, Jensen expressed that the true impacts of AI technology are yet to be fully understood by the majority of investors.
AI Frenzy Yet to Fully Erupt
Jensen has dedicated over a decade to exploring machine learning. He believes that the excitement surrounding AI is just starting to build momentum. He warned investors that they should prepare for a coming “bubble,” which he asserts is not behind us but lies ahead.
Market Speculation and Future Profits
Some prominent figures like Bill Gates and Michael Burry have drawn parallels between the current AI boom and the dot-com bubble. However, Jensen argues that we are still in the early stages, where many remain unaware of the profound market transformations that AI will bring. He stated, “Most investors don’t yet understand how radically AI will reshape markets, geopolitics, and economic growth.”
The Stakes of AI Leadership
Jensen highlighted that leading figures in AI, such as Elon Musk and Sam Altman of OpenAI, view their roles as crucial for the future of humanity. He claimed these leaders perceive the potential to control significant realms of power within a few years. This urgent perspective differs from past tech booms, as it leads to sustained capital investments regardless of high valuations or increasing costs.
Resource Grab Phase in AI
Currently, we are witnessing a “resource grab phase,” where entities compete for vital resources like power, land for data centers, and advanced chips. Jensen remarked that talent acquisition is another critical bottleneck, with fewer than a thousand individuals deemed as cutting-edge AI experts globally. The competition for these specialists is impacting the pace of scientific advancements.
Market Distortions and Economic Indicators
Despite the AI surge, Jensen noted that the market often fixates on immediate winners, which obscures deeper economic trends. According to his analysis, excluding major AI players, U.S. equities have started to lag compared to international markets. He also estimated that AI-related investment has contributed approximately one percentage point to the U.S. GDP growth this year.
Entering a Dangerous Phase
Jensen cautioned that the world is transitioning into a “more dangerous phase” regarding AI development. This phase is characterized by limited resources, increased spending, and a competitive landscape that may overwhelm unprepared investors. He believes we are merely scratching the surface of what lies ahead in the AI ecosystem.
