(Bloomberg) — A recent sell-off in chipmaker Nvidia Inc.’s shares may have stoked fears of an artificial intelligence bubble, but investors and money managers still have a mostly positive view of the technology, despite some reservations.
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Speaking at the Bloomberg Invest Summit on Tuesday, Coach Management founder Philippe Laffont said he's bullish on AI despite the hype, noting that increased investment buzz could actually be a good sign.
But Lafont expressed concern that geopolitical instability in China could affect the production of chips that underpin AI computing. For example, a Chinese invasion of Taiwan could have a negative impact on Nvidia's share price and global stock markets, he said.
Nvidia, the darling of the AI boom, rose 6.8% on Tuesday, recovering from a recent sell-off that wiped out $430 billion in market value. Earlier in the day, Neuberger Berman portfolio manager Steve Eisman, who made his name betting on subprime mortgages and holds a “large amount” of Nvidia shares, said he wasn't fazed.
“When you look at the Nvidia chart, you don't really see any correction,” Eisman said in a separate interview on Bloomberg TV on Tuesday. “I don't think it means anything.”
During a wide-ranging discussion on Bloomberg Invest, hedge fund executives, chief investment officers and others shared their thoughts on AI as an investment and discussed the technology's promise for improving productivity in the investment world.
Apollo Global Management, an alternative asset manager with about $671 billion under management as of the end of the first quarter, sees opportunities at the intersection of the energy transition and AI infrastructure, said John Zito, the firm's deputy chief investment officer for credit.
“There's trillions of dollars of spending that will be needed over the long term, and I think we're naturally in a position to allocate that,” he said, noting Apollo has provided funding to semiconductor company Wolfspeed and participated in a recent deal with Intel.
Mohammed Al Sowaidi, chief investment officer for the Americas at Qatar Investment Authority, acknowledged the “buzz” around AI.
“Fundamentally, every business needs to become more efficient,” he said, “and one of the ways to make humans more efficient and make companies more efficient is to use AI.”
Man Group Chief Executive Robin Grew said the firm, which manages about $175.7 billion in assets and is best known for its systematic strategies, has been using AI for at least a decade.
“It's part of our DNA,” Gru said.
The London-based firm has doubled its assets under management since 2016 but hasn't increased its investment headcount, Grew said. Still, AI won't make better decisions than humans, Grew said. The real benefit of AI is that it improves employee performance, not replaces them, he said.
When it comes to investing, AI “isn't just about looking backwards from predictive models,” she said. Rather, Gru said, AI techniques should be used to find “new, uncorrelated” sources of investment.
Daniel Morillo, head of quantitative strategy at Freestone Grove, echoed similar sentiments during an earlier discussion on Tuesday. The hedge fund firm, which launched earlier this year with $3.5 billion in investment capital, is focused on using AI to assist in the investment process, rather than making investment decisions.
A theme most panelists agreed on was that the most dangerous thing about AI investing is remaining on the sidelines.
“It would be irresponsible to ignore the AI revolution,” said Kim Liu, CEO of the Columbia University Endowment.
To access the full live blog, click here to read it on the terminal or here to read it online.
–With assistance from Sonali Basak and Romaine Bostick.
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