Asset managers say ignoring AI revolution is not an option
Investors and asset managers are still positive about artificial intelligence technology’s potential to transform businesses and drive growth. There are some concerns about geopolitical situations, especially around China and Taiwan.
The recent selloff in chip giant Nvidia’s stocks has caused people to fear the AI bubble, but most asset managers say that is not the case. During a broad discussion at Bloomberg Invest, chief investment officers (CIOs), hedge fund managers, and other industry analysts gave their views on investing in the AI sector.
Also read: SoftBank dumps Alibaba shares to pursue AI investments
They also discussed AI’s potential to boost production in the financial sector. Solo interviews and a series of discussions were also part of the summit. For example, Wall Street’s top regulator, SEC chair Gary Gensler, also appeared in an interview on Tuesday. Gensler talked on a wider range of topics. He said the review of plans to launch an exchange-traded fund to invest directly in Ether tokens was “going smoothly.”
Geopolitical instability is a concern
Speaking at the Bloomberg Investment Summit on Tuesday, John Zito, deputy CIO for the credit arm of Apollo Global Management Inc., said that Apollo funded chipmaker Wolfspeed Inc. and was also involved in a deal with Intel. He said,
“It requires trillions of spend on a long-dated basis, and I think we’re just naturally the place to allocate that,”
Apollo, an alternative asset manager, oversaw nearly $671 billion during the first quarter of 2024. Philippe Laffont is the founder of Coatue Management. He said that he is optimistic about AI technology regardless of the buzz. Yet, he expressed his worries about geopolitical tensions in regions near China, which may affect chip production, which is essential for powering AI.
Laffont noted the possibility that if Taiwan gets invaded, it would negatively affect global stock markets and Nvidia’s stock. A point to note here is that Nvidia’s CEO was recently in Taiwan, and TSMC is the largest supplier of Nvidia.
CEO of Columbia University’s funds, Kim Lew, said that ignoring the AI revolution would be irresponsible. Qatar Investment Authority’s CIO for Americas, Mohammed Al-Sowaidi, said that all businesses must be more efficient. He suggested that to increase the efficiency of workers in their field and to make firms more competent, it is essential to “empower them with AI.”
AI is part of our DNA, says Man Group CEO
A recent selloff washed off $430 billion from Nvidia’s market cap. However, the company’s stock started to recover, and it gained more than 6% during Tuesday’s trading session.
Neuberger Berman’s portfolio manager, Steve Eisman, is heavily invested in Nvidia and is confident about the stock’s performance despite some potential concerns. He became famous by predicting the collapse of subprime mortgages. He said,
“If you look at the chart on Nvidia, you can barely see the correction,”
He was talking in a separate Bloomberg interview on the same day. Pointing to Nvidia’s recovery from the stock dip, Eisman said that he doesn’t think the correction means anything.
Also read: US proposes new rule to curb AI investments in China
Robyn Grew, CEO of Man Group, said the company has been utilizing artificial intelligence for the last ten years. Man Group manages $175.7 billion of funds and provides systematic investment strategies to its clients.
Speaking at the invest summit, Grew said, “It’s part of our DNA.” She was referring to AI. The group has doubled its assets over the last eight years without increasing its workforce in operations. Grew said humans will make better decisions than AI, but AI can help improve human performance rather than replace them.
Cryptopolitan reporting by Aamir Sheikh
