Billionaire venture capitalist Vinod Khosla warns that people will lose a lot of money chasing the AI trade.
In a new Fox Business interview, Khosla says investors pouring money into the AI trade would be better off following the example of fellow billionaire Warren Buffett.
He makes the statement as he believes that most bets in AI will not pay off.
“You were just talking about Warren Buffett. He doesn’t invest for the next quarter. He invests for the next decade, as you’ve seen from his bets. I think that is the way to approach AI. I believe most investments in AI will lose money, but much more money will be made than lost. Because if you make the right ones, they will be humongous permanent entities. Many, many trillion-dollar valuations will be created.”
Khosla points to Google’s recent $3 trillion milestone as proof that massive outcomes are possible.
“It used to be a weird thing to talk about trillion-dollar market caps, and it’s all tech companies. My bet is more new trillion-dollar caps will be created in the next 10 years.”
He also contrasts his approach with trading and market timing.
“I do think short-term investing, which I don’t know much about, I don’t trade, some people will do well at timing the market, but the right way to play the market is to say, here’s my beliefs about 2030 and 2035 and the large economic changes driven by a technology like AI and bet on that.”
Last week, former PayPal exec Jack Selby warned that the AI frenzy is breathing life into an unprecedented bubble that could wipe out vast sums of investor money. He predicted that tens, if not hundreds of billions of dollars, will be incinerated once the AI bubble bursts.
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