Artificial intelligence may change the world, but Wall Street veteran David Einhorn thinks the spending spree behind it could leave investors nursing huge losses.
Speaking at the New York Stock Exchange, the Greenlight Capital founder said the trillion-dollar push into AI infrastructure by the likes of Apple, Meta and OpenAI has reached “extreme” levels.
While he expects the technology to exceed today’s lofty forecasts in the long run, he doubts that annual outlays of $500 billion to $1 trillion can generate strong returns for shareholders.
“The numbers that are being thrown around are so extreme that it’s really, really hard to understand them,” Einhorn said druing a panel discussion.
“I’m sure it’s not zero, but there’s a reasonable chance that a tremendous amount of capital destruction is going to come through this cycle.”
Sam Altman of OpenAI has spoken of spending “trillions,” while Mark Zuckerberg has floated hundreds of billions for data centres. Apple has pledged $500 billion in domestic investment over four years.
Einhorn also struck a downbeat note on the broader economy, citing weak job creation, shrinking workweeks and poor productivity as signs the US may already be in recession.