Billionaire Bill Ackman says the global race to build the artificial intelligence infrastructure carries one potential downside.
In a new CNBC interview, the Pershing Square Capital founder says today’s AI boom is comparable to earlier technological revolutions that permanently reshaped economies and capital markets.
But he says investors should be cautious about the possibility of overproduction amid the mania.
“It’s a bit like the railroad. It’s a bit like fiber. The worst-case scenario is we have excess capacity.”
While investors may face short-term pain from overbuilding, he says the world would ultimately benefit.
“Intelligence is not something that you’re ever going to have excess capacity for. So if and when we achieve AGI, this is a Lollapalooza effect for the world. We’re already starting to see impacts on cancer discovery. So imagine a world where we can address every disease. Imagine a world where the power of superintelligence is worth a meaningful investment.
Will some companies go bust? For sure. But I wouldn’t bet against… The Alphabets of the world have the resources to make these investments for a profitable business. “
The Lollapalooza effect is a term coined by billionaire and investing legend Charlie Munger, referring to a rare convergence of forces with exponential economic potential.
In September, Morgan Stanley predicted that spending could soar to $7 trillion through 2030 to support AI infrastructure activities.
Turning to geopolitics, Ackman says friendly relations between the US and China would be a world-changing positive development.
“I think it’s really unfortunate that two of the most important powers in the world are at loggerheads. And I just think we should make peace with China. I think that would be very, very good. That would be an incredible white swan.”
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