A senior Morgan Stanley wealth executive says a key development in capital markets could play an outsized role in shaping the next phase of the artificial intelligence buildout.
In a new CNBC interview, Chris Toomey, managing director at Morgan Stanley Private Wealth Management, says the AI expansion is still in its earliest stages, with demand running well ahead of available supply.
“I think we’re in such an embryonic piece with regards to this buildout within AI that it’s probably still too early for us to get too far ahead of ourselves. There is so much demand, and the supply is yet to get online, that we still have a fair amount of runway before that becomes a real issue.”
Toomey also notes that the current surge in investment reflects both gradual adoption and an arms-race dynamic among major players.
“There’s a combination of things that we’re dealing with. One is just the gradual [adoption] and then the demand for it with regards to compute and the ability to get it. And I think that’s why you’re seeing so much money flowing into areas around this because I think it is going to be a situation where it could be a winner-take-all strategy.”
Toomey acknowledges that markets can move ahead of fundamentals, pointing to how past AI-linked stocks have surged and then pulled back.
Despite the risk, Toomey says his team remains focused on staying invested while watching for pressure points, particularly in credit markets where supply is increasing, and spreads remain tight.
“You want to diversify out some of that risk.”
Toomey points to what he sees as a pivotal catalyst that could inject fresh liquidity into the system and support continued investment.
“Our biggest call is probably in the private markets. You guys were just talking about probably one of the largest IPOs coming forward. That’s going to create an additional amount of liquidity coming back into the system. We think all of that’s very healthy.”
Recently, reports emerged that SpaceX is exploring a 2026 initial public offering (IPO) at a staggering $1.5 trillion valuation. In October, ChatGPT creator OpenAI was reportedly laying the groundwork for a $1 trillion IPO as soon as next year.
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