Howard Marks, co-founder and co-chairman of Oaktree Capital Management, does not consider artificial intelligence a classic bubble, despite high valuations, speculative funding, and massive debt in the sector. He distinguishes an inflection bubble, linked to a genuine technological shift, from a mean-reverting bubble that would imply immediate wealth destruction. Marks notes that AI-related stocks have accounted for a significant portion of S&P 500 gains, with over one billion dollars in seed funding flowing to unproven startups. He recommends a balanced approach, neither going all-in on AI nor pulling out of the market entirely, and warns of potential job losses and wealth destruction in the event of a market correction.
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