Former Barclays chief executive Bob Diamond says the market is struggling to digest the sheer scale of money pouring into artificial intelligence, feeding into the current correction in risk assets.
In a new Bloomberg interview, Diamond says investors are overwhelmed by the capital being deployed into data centers and AI infrastructure.
“One of the things we were talking about there was the big numbers in AI. I mean, the billions here, trillions there, billions here, data centers. And I think most people have a hard time really processing it.”
He says the confusion over valuations does not contradict a strongly positive outlook for the technology over the next several years.
“What I feel comfortable with is taking a two, three, five-year view of the impact of AI. I think it will be a real positive in dampening inflation. I think it is going to be incredibly important in terms of productivity in the global economy.”
Diamond notes that many investors are drawing parallels to the dot-com era, when speculative names distorted perceptions of a real long-term shift.
“And I think some people are confused right now over the valuations. And many people say this, they look back to the internet bubble in 2000, right? It had a real bubble because there were some fringe equities that probably were not legitimate as much as kind of the core. But nothing stopped the development of the internet over the next 10, 15, 20 years.”
He says sentiment among his peers remains firmly optimistic about what AI can deliver.
“And I think the consensus over the last day has been where really we, the group, are very, very positive on what AI can bring in terms of productivity, dampening inflation, global growth, really comfortable.”
For now, Diamond says the pullback is a broad reset rather than the end of the AI story.
“So I think this is a correction in risk assets across the piece. And I think AI, partly because there are so many big numbers out there, that people really do not understand yet, and particularly around data centers.”
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