‘We’re barely scratching the surface’

• The AI ​​boom is “very different from the dot-com bubble,” says Dan Loeb.

• The hedge fund billionaire noted the healthy profits and cash generation of Big Tech companies.

• Claude praised the rapid growth of maker Anthropic and the popularity and usefulness of its models.

Dan Loeb says the AI ​​boom is a far cry from the dot-com bubble.

billionaire investor He said on the “Invest Like the Best” podcast that he wasn’t impressed that Big Tech companies were spending hundreds of billions of dollars on microchips and data centers to power their AI models.

“If you don’t believe that capital expenditures will produce returns, then they are just flushing money down the toilet,” Third Point founder and CEO he said in an episode airing on Thursday.

Alphabet, Microsoft, Amazon and Meta announced that they will invest over 700 billion dollars A total of $1 trillion this year and next year, with the vast majority of spending going to artificial intelligence.

Third Point, which manages approximately $24 billion in assets, identified a $404 million stake in Amazon as its largest position as of the end of March, according to its latest portfolio update. He also listed Alphabet, Meta and Nvidia among his holdings.

Loeb said he wasn’t worried, given that Big Tech’s earnings were “really strong” and that they were “generating tremendous amounts of cash,” allowing them to finance a large portion of spending “from their balance sheet.”

“It’s very different from that dotcom bubble“We fell short going into it and had good numbers in those years,” the hedge fund manager said.

Unlike the late 1990s and early 2000s, Loeb said,valuation bubble“

Claude noted manufacturer Anthropic’s strong revenue growth, rapid adoption and usefulness of its products, and rumors about future models.

Anthropic announced Thursday that it had raised the money. $965 billion valuation In the last financing round, it increased to $380 billion in February. Its annualized revenue increased from $14 billion to $47 billion during the same period.

“You could make a good argument that we don’t mean much on the surface,” Loeb said. “There are so many layers of startups, so I camp of optimists“

Excitement about artificial intelligence has sent stocks to record highs, but skeptics, including “The Big Short’s” Michael Burry, are wary. rang the bubble alarmHe warned that demand would decrease and predicted that Big Tech companies would not be able to reap the rewards of their huge investments.

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