Jim Chanos, Bank of America and others still not jumping on the AI ​​hype bandwagon

jim chanos

Famous short seller Jim Chanos shrugged off the AI ​​hype this week.Reuters

  • Artificial intelligence has triggered a major stock market rally in 2023.

  • But some high-profile investors — including famed short seller Jim Chanos — aren’t buying into the hype.

  • Others, like Warren Buffett, have expressed concerns about the dangers of AI.

Artificial intelligence has become a major driver of stocks this year – with bullish investors fueling triple-digit gains for Nvidia, and other blue-chip tech companies also trading higher on the hype for ChatGPT.

But some big investors aren’t buying the hype.

For every Bill Ackman or Stanley Druckenmiller — who piled into AI-related stocks in the first quarter — there’s a Jim Chanos, who ignores the surge with casual indifference.

“Oh boy – Wall Street is pretty good at creating supply to meet demand,” the famous short seller said on Twitter last week, responding to another investor’s claim that he doesn’t. There isn’t enough total market capitalization to “sustain the buy mania” for IA.

For Chanos and others, the craze currently taking Wall Street by storm has more in common with fads like the Metaverse than with game-changing technologies that have truly disrupted the stock market.

Similarly, Bank of America strategists said last week that surging AI stocks like Nvidia may well be in a so-called “baby bubble” that will burst as the Federal Reserve pursues further news. interest rate hikes.

“Don’t pursue here…financial conditions are tightening again,” the strategists warned, pointing to previous stock market fads that were interrupted by the tightening of financial conditions.

While Chanos and Bank of America aren’t buying into the AI ​​fanfare, other big investors are just worried about the potential harm the technology could cause, including Berkshire Hathaway CEO Warren Buffett and his partner commercial, Charlie Munger.

“He can do all kinds of things,” Buffett said at Berkshire’s annual shareholder meeting last month. “And when something can do all kinds of things, I worry a bit because I know we won’t be able to uninvent it.”

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

Learn more: Billionaire investors Warren Buffett and Charlie Munger unconvinced by AI hype: ‘Old-fashioned intelligence works pretty well’

Read the original article on Business Insider

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