Citadel's Griffin Calls AI "Almost Certainly" a Bubble, Warns Chip Rental Rates May Not Hold

Citadel founder Ken Griffin said Tuesday that investors are "almost certainly" in an AI bubble, though he advised against dumping AI stocks, speaking at the firm's Future of Global Markets Conference in New York on Oct. 20. Griffin compared GPUs to airline seats, noting both carry low marginal costs, so prices can collapse once supply outpaces demand. He pointed to the 2000 telecom boom, when fiber capacity exceeded demand and communication prices fell, and doubted that chips five or six years old earning "extraordinary" rental rates will sustain those returns for another five or six years. He argued radical economic transformations are "generally intertwined with a bubble," citing the internet boom, and said companies emerging from bubbles tend to lead markets for decades. Griffin noted AI agents cut some high-level Citadel research from weeks to hours. Buyers are growing pickier about which tasks justify premium models from OpenAI and Anthropic versus cheaper open-source alternatives, he said. Gartner forecasts worldwide AI spending near $1.5 trillion for 2025.