Investor and CEO of Ark Invest, Cathie Wooddisputed claims of an unsustainable bubble in the AI and cryptocurrency markets, saying the current liquidity pressure is temporary and expected to reverse course soon.
Liquidity pressure will reverse
On Monday, in a post on
On the podcast, Wood said that long-term opportunity remains for AI and cryptocurrencies, despite short-term volatility and uncertainty around productivity impacts. “We believe this AI story is just beginning,” she said. “We are in the first half”
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Referring to recent market declines as a “liquidity squeeze”, Wood said this would reverse course over the next “few weeks”.
Accelerating commercial and consumer demand for AI
In response to a recent MIT study that claimed “companies do not see any productivity gains” from AI and concluded that it is a “bubble,” Wood responded, framing the issue in terms of a transitional phase.
She said companies must “completely restructure and transform” to unleash the full potential of AI, a process that “will take time.”
“But on the consumer side, it is booming,” she said, highlighting the massive adoption of chatbots and AI tools like ChatGPT, among consumers.
And highlighted Palantir Technologies Inc (Nasdaq:Belter) As evidence of the high demand from companies, it pointed out that “its business in the United States increased by 123% in the last quarter.” According to Wood, this increase reflects increasing pressure among CEOs and senior decision-makers to act quickly to maintain their competitive edge.
A dangerous bubble in US stocks
However, several prominent analysts and market strategists have expressed concern about the growing dominance of AI-related stocks in US stock markets, warning that current valuations may be unsustainable.
Global strategist at Société Générale, Albert Edwards, The similarities between Current market conditions and the dot-com bubble of the late 1990s.
Edwards also highlighted key differences in the current scenario, noting the economy’s heavy reliance on AI spending and investments, making it more vulnerable compared to bubbles of similar size seen historically.
Investor and author Ruchir Sharma He echoed similar concernsClaiming that the United States has become a “big bet on AI,” with 40% of US economic growth this year driven by increased capital expenditures in the field of AI.
Sharma also said that these massive capital expenditures have masked many other concerns in the broader economy, which he said is closer to a screeching halt.
Microsoft Corporation (Nasdaq:MSFT) Founder and billionaire Bill Gates Acknowledge existence bubble, emphasizing the “profound” value of AI, which he said is “hard to overstate.”
Gates said that the artificial intelligence craze is a far cry from “tulip mania,” referring to the historical bubble surrounding tulip bulbs in the Netherlands in the 17th century. Instead, he said, it more closely resembles the early stages of the Internet in the late 1990s.
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