One advantage of my role is that I regularly speak with investors and asset managers across both public and private markets, including equities, credit, and alternative investments. Despite the wide range of strategies and perspectives, one concern is currently consistently dominating the conversation: is the recent AI surge a bubble that could eventually pop?

I believe AI will ultimately produce far more positives than negatives for both the global economy and financial markets. The efficiencies created through automation, productivity gains, and technological advancement are likely to be enormously beneficial over the long term. While there will absolutely be volatility along the way, I believe global markets will continue to trend higher as these benefits increasingly flow through the system.

That said, I would not be surprised to see a meaningful backlash against AI and automation over the coming years — protests, anti-AI political movements, resistance to robotics, and broader concerns around job displacement and social disruption. Those concerns are understandable, and I can certainly empathize with anyone worried about how these changes may affect their livelihood. However, if history is any guide, major technological advancements have often ultimately created new opportunities, industries, and higher-paying jobs once society adapts to and embraces the technology.

Getting to that point will take time, as people naturally fear what they do not yet fully trust or understand.

A good example is self-driving technology. Today, I think most people would still prefer having a human driver behind the wheel because the trust simply is not fully there yet. But the data increasingly suggests autonomous driving systems is proving to be significantly safer than human drivers (and it’s only going to improve from here). If this trend continues, the long-term implications could be enormously deflationary and economically beneficial: fewer accidents, lower insurance costs, fewer fatalities, reduced congestion, and greater efficiency across transportation networks.

Ultimately, economics is usually what changes behavior fastest.

When consumers are given a choice between a human-driven ride and a fully autonomous vehicle that costs 50% less — while also statistically being safer — that becomes a very powerful incentive to adopt the technology. I believe it is those types of economic advantages that will gradually push society from mistrust and resistance toward broader acceptance.

As society adapts and the advantages become more tangible in everyday life, these technologies will increasingly become normalized. Much like the internet or smartphones once did, what initially feels disruptive and uncomfortable eventually becomes embedded into daily life in ways we can hardly imagine living without.

Bubble or wave?

In the past, I’ve often said that I’m less concerned about bubbles themselves and more concerned about when they actually pop. But lately, I’ve started thinking about AI differently altogether.

Rather than a bubble, I think AI is better understood as a wave.

Technological revolutions tend to come in powerful waves that build momentum, crest, pull back, and then build again. Sometimes the enthusiasm becomes excessive and prices move too far too fast. The energy temporarily comes out of the trend, but the underlying force remains intact and eventually reaccelerates. That feels far closer to what we are seeing with AI today.

I also believe there are multiple waves occurring simultaneously. There is a technological wave driven by AI and automation. There is also a broader deflationary wave as software, robotics, and machine intelligence increasingly squeeze inefficiencies out of the economy.

Of course, waves do not move uninterrupted. There will be obstacles that create volatility and temporarily disrupt momentum. Geopolitical conflicts, inflation scares, energy shocks, higher interest rates, and unforeseen risks can all interfere with the trend. The recent Iran conflict is a perfect example.

That is why I found recent comments from Tom Lee particularly interesting. While he has warned about potential summer weakness tied to inflation pressures, higher yields, geopolitical tensions, and increased IPO supply, he has also maintained a much more optimistic longer-term outlook once those pressures ease. In fact, Lee recently suggested that once this period of uncertainty passes, the following 12 to 18 months could potentially deliver some of the strongest market rallies of our lifetimes. Now, to be fair, Tom Lee is well known for being optimistic. But he also has a very strong long-term track record, which is why I think his perspective deserves attention. 

At the same time, I think investors need to recognize what is actually happening underneath the surface of the AI economy. A true bubble generally collapses when supply meaningfully exceeds demand. Right now, I see the exact opposite. We continue to face shortages across nearly every major layer of the AI ecosystem: power generation, data centers, GPUs, advanced memory, electrical infrastructure, and engineering talent.

Importantly, it is these shortage areas where we continue to focus our investments. I’ve spoken extensively in the past about energy, and we continue adding to those positions — not just traditional exposure like oil and gas, although those markets have obviously been impacted by the recent Iran conflict, but renewable and alternative energy as well. More broadly, we are focused on the entire energy and infrastructure buildout required to support this technological transition: electrical grids, power generation, transmission infrastructure, and the “picks and shovels” companies supplying the backbone of the AI economy.

That is where I continue to see some of the most compelling long-term upside.

At the same time, we are trying to remain disciplined. As certain areas of the market have appreciated significantly, we have gradually trimmed positions and taken profits where valuations became stretched. We are not simply all-in on AI at any price. Instead, we are looking across the broader ecosystem and identifying industries that benefit indirectly from the buildout as well.

I also continue to believe investors are underestimating how deflationary automation may ultimately become. AI, robotics, and software agents are increasingly squeezing inefficiencies out of the economy. Contrary to many fears, early evidence suggests AI may actually be net job-creating rather than purely job-destroying, particularly for highly productive workers and technical industries.

None of this means markets will move in a straight line. Corrections are normal. Sentiment can shift quickly. Geopolitical risks remain real. But when I step back and look at the bigger picture, I continue to believe the dominant long-term themes remain AI, automation, energy infrastructure, and digital scarcity.

Sometimes the hardest part of investing is remaining patient while the world debates whether a transformational trend is sustainable. In the meantime, from the perspective of an asset manager watching these technological, economic, and geopolitical shifts unfold in real time, it is an incredibly fascinating,  and exciting, environment to navigate.