Ken Griffin Says AI Is 'Almost Certainly' in a Bubble—And Compares GPUs to Airline Seats

Citadel founder Ken Griffin said on Oct. 20 that investors are "almost certainly" in an AI bubble, but he did not recommend selling AI stocks. Speaking at Citadel's Future of Global Markets Conference in New York, Griffin argued that transformative technologies are generally accompanied by bubbles, recalling the internet boom and saying he wished he had kept his Amazon stock. He said the companies that survive a bubble's collapse tend to be market leaders for decades, but stopped short of predicting a collapse. Because the AI buildout has underpinned equity markets over the past year, many index funds and retirement accounts hold exposure to the theme, according to the report.

Griffin drew an analogy between GPUs, the graphics chips used to train and run AI models, and airline seats. Both have very low marginal costs to serve one more customer, so prices can fall sharply once supply outstrips demand. He cited the telecom boom around 2000, when companies laid more fiber-optic cable than demand required and communication prices fell. He also questioned whether chips five or six years old will continue to earn their current rental rates, which he described as extraordinary, for another five or six years.

Griffin said corporate buyers are becoming more selective, deciding which tasks justify premium models from OpenAI and Anthropic and which can run on cheaper open-source models that can be downloaded and run locally. He said corporate America has been uneven in extracting value from AI, with companies questioning where productivity gains are appearing in their bills from AI labs. Gartner forecasts worldwide AI spending of nearly $1.5 trillion for 2025, including chips, servers and AI-enabled phones. Nvidia CEO Jensen Huang said at Davos in January that the industry is only "a few hundred billion dollars" into what he called the largest infrastructure buildout in human history.

Griffin also referenced Citadel's own use of AI, saying AI agents cut some high-level research tasks from weeks to a couple of hours. In a related development, Citadel bought most of the public stock portfolio of Situational Awareness, a hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, on July 30 at roughly a 10% discount after the fund's value reportedly fell about 67% in July. The fund had used leverage of up to four times its capital, and lenders had demanded additional collateral as prices fell. Griffin wrote in an August letter to clients that Citadel had since shed more than 80% of the risk in that portfolio.