Bank of America’s Jim Chanos and others still don’t buy into the AI ​​hype

• Artificial intelligence has caused a massive stock market rally in 2023.
• But some big investors, including prominent short seller Jim Chanos, don’t buy into the hype.
• Others, like Warren Buffett, have expressed concern about the dangers of AI.

Artificial intelligence has emerged as one of the biggest drivers of stock prices this year, with bullish investors fueling triple-digit earnings for Nvidia and other blue-chip tech companies rallying in the wake of the ChatGPT craze. ing.

But some top investors don’t buy into the hype.

Bill Ackman and Stanley Druckenmiller, whose AI stocks surged in the first quarter, have Jim Chenos dodging the surge with casual indifference.

“Oh, Wall Street is very good at creating supply to meet demand,” a prominent short seller tweeted last week, citing fellow investors who said there wasn’t enough market capitalization to “support the buying mania.” In response to the allegation, he said: love.

For Chenos and others, the fad currently sweeping Wall Street has more in common with fads like the Metaverse than with the revolutionary technology that truly disrupted the stock market.

Similarly, Bank of America strategists said last week that the surge in AI stocks such as Nvidia is likely to be in a so-called “baby bubble” that will burst as the Federal Reserve hikes rates further. Stated.

Noting that tightening financial conditions have ended past stock market booms, strategists warned, “Don’t chase here… Financial conditions are tightening again.”

Chanos and Bank of America aren’t buying into the AI ​​fanfare, but other top investors, including Berkshire Hathaway CEO Warren Buffett and his business partner Charlie Munger, believe the technology is driving them. I’m just concerned about the potential damage that could be done.

“We can do all sorts of things,” Buffett said at Berkshire’s annual shareholder meeting last month. “And when something makes all sorts of things possible, it worries me a little bit because we know we can’t not invent it.”

“I’m personally skeptical of some of the hype around artificial intelligence,” Munger added. “I think old-fashioned intelligence works pretty well.”

read more: Billionaire investors Warren Buffett and Charlie Munger aren’t convinced by AI hype: ‘Old-school intelligence works pretty well’