Cathie Wood says growing skepticism toward artificial intelligence mirrors the psychology of past market bubbles, but notes that today’s AI buildout differs in crucial ways from the dot-com era.
Speaking in a new ARK Funds webinar, the ARK Invest chief executive says many veteran investors are pulling back because they lived through the technology and telecom bubble and are wary of repeating that experience.
“I think the reason that’s happening is the most seasoned investors in our business probably experienced the tech and telecom bubble. They’ve been there, done that, and they don’t want to get trapped again, and they’re telegraphing that.”
Wood says those same investors should also recognize how different the current cycle is, pointing to how capital was deployed during the dot-com boom.
“Those who were in the bubble, though, also should understand how different this is. And I’m going to call out Brad Gerstner from Altimeter, who describes the difference between then and now. Back then, we were pouring money into broadband, dark fiber it ultimately became. It never lit up, or let’s put it this way, it took a decade or more to light that fiber up.”
She contrasts that period of excess capacity with what she describes as today’s tight supply conditions in AI infrastructure.
“Today, we have a shortage of GPUs, and every GPU being produced is in use.”
Wood acknowledges concerns about stockpiling but argues that even that dynamic looks different in a fast-moving technology cycle.
“Sure, there may be some hoarding, but even that world is moving so quickly, it wouldn’t make sense to hoard because of the leapfrogs in technology we’re seeing in such short periods of time, another difference between then and now.”
Atreides CIO Gavin Baker echoes Wood’s view that AI is not the same tech cycle as the one witnessed in the 1990s bubble. In November, Baker said that there are no dark GPUs today, and firms that have heavily invested in GPUs are seeing a 10-point increase in their return on invested capital.
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