Citadel's Griffin Says AI Bubble Is Real but No Reason to Dump Stocks

Citadel founder Ken Griffin said investors are "almost certainly" in an artificial intelligence bubble, but he stopped short of recommending selling AI shares. Speaking Tuesday at Citadel's Global Markets Future Forum in New York, Griffin said what survives a bubble often changes the world and becomes the market leader for decades. The debate extends beyond tech investors. AI buildout has been a key support for equities over the past year, leaving index funds and retirement accounts exposed. Griffin compared GPUs used to train AI models to airline seats: marginal operating costs are low, so once supply exceeds demand, prices can fall sharply. He cited the fiber-optic glut around 2000 and questioned whether chips aged five to six years can keep commanding what he called "amazing" rents. Buyers, he said, are growing pickier about which tasks justify premium OpenAI and Anthropic models versus cheaper open-source alternatives. Gartner estimates 2025 global AI spending near $1.5 trillion. Nvidia CEO Jensen Huang said in January at Davos that only "hundreds of billions" of the "largest infrastructure wave in human history" has been invested. On July 30, hedge fund Situational Awareness sold most of its listed portfolio to Citadel at roughly a 10% discount after the portfolio fell about 67% in July; Citadel has since cut over 80% of that portfolio's risk. Griffin also warned that a six-to-12-month closure of the Strait of Hormuz would sharply raise energy prices and tip the world into recession. Goldman Sachs Research said in December that analysts expect capex growth among major AI infrastructure players to slow from 75% in Q3 2025 to 25% by end-2026.