AI Boom Spells Danger, Tech Titans Eyeing 'Power To Control Earth', Warns Hedge Fund Veteran

The artificial intelligence boom has taken over Wall Street's megacap tech giants as global leaders and investors figure out the innovational shift in business. In the same backdrop, Greg Jensen, co-chief investment officer at Bridgewater Associates said in a recent interview that investors who are convinced the AI boom has gone too far should brace for what's about to hit the market, according to a report by Business Insider.

According to Jensen, global AI leaders including Elon Musk and Sam Altman believe that the stakes are existential and that ''the power to control Earth and the universe is only a couple years away.'' The hedge fund leader believes the world is now entering a "more dangerous phase" of the AI cycle — defined by scarce resources, higher spending, and intense competition — and that investors are not prepared for what comes next.

Jensen said the market still hasn't grasped how transformative the technology will be or how much capital is about to flood into it. Leading business leaders and investors, such as Bill Gates and Michael Burry, have said that the AI boom resembles the dot-com era. However, Jensen believes the world hasn't even reached the speculative phase. The hedge fund executive has spent more than a decade working with machine learning.

"The bubble is ahead of us, not behind us," Jensen said in an interview on the "In Good Company" podcast on Wednesday with Norges Bank Investment Management CEO Nicolai Tangen, as per Business Insider. The veteran believes we're still in the phase "where people have no idea what's hitting them," and that most investors don't yet understand how radically AI will reshape markets, geopolitics, and economic growth.

Elon Musk's constant spending on developing AI platforms and OpenAI's advancements has proved that tech giants will leap on incentives to capitalise on AI. As per Jensen, that mindset means capital expenditure won't slow just because valuations look stretched or funding gets expensive. He believes the ''money is going to get spent''

The accelerating spending has triggered what Jensen calls a "resource grab phase," unlike anything the tech industry has experienced before. He noted that the rush for power, data-center land, and advanced chips is already creating bottlenecks, including the talent space. Jensen estimated "less than a thousand" people globally qualify as truly cutting-edge AI scientists, and the fierce competition to hire them is slowing down the global scientific progress.

Despite AI's growing impact on equities, currency, and commodities, Jensen said investors still focus too narrowly on the current winners. Meanwhile, AI-related capital spending is now large enough to move macro indicators: Jensen estimates that about one percentage point of US GDP growth this year stems from AI investment alone. Jensen added that "all of this is just the beginning".

The 'AI bubble' essentially refers to the possibility of the AI boom having outrun the fundamentals, where the stock valuations of AI-linked tech companies are seen as inflated as compared to their profits and revenue.