Key facts
- Griffin believes companies emerging from AI bubbles often become market leaders.
- He warned of potential price collapses for GPUs due to oversupply.
- Corporate buyers are increasingly considering cheaper open-source AI models.
- Griffin recalled the internet boom as a similar transformative period.
Citadel founder Ken Griffin stated on Oct. 20 that the current market is "almost certainly" experiencing an AI bubble, though he advised against selling AI stocks. He believes that companies emerging from such transformative periods often become long-term market leaders, drawing parallels to the internet boom.
Griffin compared the economics of Graphics Processing Units (GPUs) to airline seats, suggesting that a potential glut in supply could lead to a sharp decline in prices, similar to the fiber-optic cable market around 2000. He also noted that corporate clients are increasingly evaluating the cost-effectiveness of premium AI models from companies like OpenAI and Anthropic against cheaper open-source alternatives.
His firm, Citadel, has reportedly benefited from the AI market's volatility. On July 30, Situational Awareness, a hedge fund founded by a former OpenAI researcher, sold a significant portion of its AI stock portfolio to Citadel at a discount after experiencing substantial losses. Griffin indicated in an August letter that Citadel had since reduced its risk exposure in that portfolio.