Famed investor Howard Marks has released an analysis of the artificial intelligence revolution, cautioning about its rapid pace of development and adoption. Marks’ assessment comes ahead of his appearance at The Australian Financial Review Business Summit. Marks is known for his investment memos, which are revered for their common-sense approach in a volatile investment world.
Marks emphasises the unprecedented speed at which AI is evolving, stating, “Nothing has ever taken hold at the pace AI has.” He notes that AI’s ability to rapidly change the world outpaces observers’ ability to anticipate or comprehend its effects. While acknowledging he doesn’t fully understand how AI functions, Marks believes its power lies in its capacity to efficiently process and order information, performing tasks better than most humans.
He raises concerns about the potential societal impact of AI’s rapid adoption, suggesting it could lead to significant job displacement and outstrip society’s ability to adapt. Drawing parallels to the impact of offshoring on manufacturing jobs, Marks warns that AI could affect even more jobs, and at a faster rate. This concern is compounded by the fact that society is unable to fully grasp the abilities of AI and what it might do to society.
Regarding the financial implications, Marks acknowledges the possibility of a bubble in AI infrastructure investment, but suggests it’s too early to judge the long-term returns. He cautions against assigning excessively high valuations to AI start-ups with unproven strategies. However, he believes human investors can still outperform machines due to their intuitive risk assessment and emotional awareness, qualities AI lacks.
