Is AI in a Bubble?

Jenny Johnson says AI feels frothy in some areas, and she would not finance data centers long term because that bet assumes today's chip manufacturing and energy production stay in place for the next 20 or 30 years.

Molly O'Shea brought up Ken Griffin's point from the Citadel Securities Conference: nobody knows chip supply and demand, including when the chips being made now will expire. Johnson remembers a Gartner curve she could not name exactly. New technology gets called the greatest thing ever, runs all the way up, then crashes when people are disillusioned, and later settles where it should. The question is where AI sits on that curve. Demand makes people innovate, so assuming today's technology does not change dramatically for 20 or 30 years would be unusual.

She still likes the financing on a shorter term. These are big cash-flowing companies with significant earnings, not internet-bubble companies that had no revenue, so they can pay their debt. Comparing revenue across companies is not apples to apples, which is why she wants active managers who know the investments. She says Griffin is probably right on the chip question.