Global markets have experienced a significant downturn, with investor focus sharply turning to potentially stretched valuations of artificial intelligence (AI) companies. Isaac Kim, a partner at Lightspeed, which manages approximately $70 billion and backs Anthropic, noted growing warning signs. Anthropic develops the popular Claude platform, offering advanced AI solutions. While acknowledging a possible “AI bubble,” Kim advised a long-term view, citing the technology’s nascent stage and disruptive potential at a recent investment conference.
The recent market upheaval saw Wall Street’s S&P 500 plummet 4.4 per cent and the Nasdaq fall 5.5 per cent, its largest daily slump since April last year. This global sell-off, impacting Asian markets significantly, was partly attributed to unease over a potential Democratic wave in the United States, anticipated to increase scrutiny on AI technology and its underlying data centres. Amidst this, David Allen from Plato Investment Management expressed “red flags” regarding Anthropic’s impending Nasdaq listing, despite attractive margins and “eye-watering” revenue growth. He urged scrutiny of the balance sheet, recalling Firmus, an AI data centre developer, which recently called off a $7 billion ASX listing attempt.
Vihari Ross, a portfolio manager at Antipodes, highlighted an “extreme level of concentration” in AI-related stocks, noting top 10 now comprise 40 per cent of the global index—a concentration last seen during the 2000 dot-com crash. However, some fund managers remain bullish. John Wylie from EFM Asset Management saw the sell-off as an opportunity for Nvidia. Milford Asset Management’s Andrew Curtayne pitched ASML, a Dutch chip equipment maker, viewing the sector as a “perfect hunting ground,” and Munro Partners’ Nick Griffin remained bullish, suggesting volatility was clearing market “excesses.” While Australia’s S&P/ASX 200 Index held steady, heavy AI stock concentration will affect local superannuation funds.
