① Hedge fund executive Tony Yoseloff warned that the competition for artificial intelligence... The race for dominance has evolved into a costly contest, trapping large tech companies in a "prisoner's dilemma";②Yoseloff points out that the market is behaving as if the returns from artificial intelligence are imminent, but the actual benefits may take years, and the market has limited patience for these returns.
A recent warning from a hedge fund executive states that the race for dominance in artificial intelligence (AI) has turned into a costly contest, trapping large tech companies in a “prisoner’s dilemma.”
The "Prisoner's Dilemma" is a representative example of non-zero-sum games in game theory. It describes the conflict between cooperation and betrayal that individuals may face in a game situation, reflecting that the best choice for an individual is not necessarily the best choice for the group. In other words, when faced with a dilemma, actors often tend to consider a way that is relatively self-interested but detrimental to the best interests of the group.
Tony Yoseloff, chief investment officer of hedge fund Davidson Kempner Capital Management, pointed out, "You have to invest because your peers are investing too, so if you fall behind, you won't be in a stronger competitive position."
The company manages approximately $37 billion in assets.
He further pointed out that the impact of consumer dynamics extends beyond Silicon Valley. With a few large-cap tech companies dominating the U.S. stock market, their actions now affect virtually every investor.
"Artificial intelligence volatility" riskYoseloff doesn't view artificial intelligence as hype. Instead, he places it within the long-term pattern of technological change. He points out that since the widespread adoption of personal computers in the US in the 1980s, it took about 10 years for workplace productivity to improve. It took about five or six years to see similar gains starting with the mass marketing of the internet.
If history repeats itself, the economic benefits of today's AI boom may take years to materialize. But Yoseloff points out that the market is behaving as if the rewards are just around the corner.
“So the way I like to think about this is: Will artificial intelligence fluctuate at some point? Will investors worry about how these capital expenditures will be invested?” he added.
Yoseloff points out that the massive AI spending is driven by some of the world's healthiest companies, which have the ability to reinvest their cash flow. But the public markets may not be so patient.
He asked, "What happens when the market starts to question the assumptions about the returns on these types of investments? How patient will the market be with those returns?"
Yoseloff also compared the current situation to the early "dot-com bubble" and the "Nifty Fifty" era, when markets were highly concentrated and there was a strong enthusiasm for breakthrough technologies and growth stocks. He emphasized that while these trends were based on genuine innovation, it took investors approximately 15 years to recoup their investments.
Yoseloff made these remarks amid a broader debate about whether massive investment in artificial intelligence is pushing the stock market into a bubble. Some leaders, including OpenAI CEO Sam Altman, cautioned against excessive excitement about AI, while acknowledging its game -changing potential. The potential of rules.
“Are we in a phase where investors are generally overly excited about artificial intelligence? My view is yes,” Altman told reporters in August, adding that it was also “the most important thing” happening for a long time to come.
In late October, Microsoft Co-founder Bill Gates likened the current environment to the dot-com bubble of the late 1990s and warned that "many investments will eventually fail."
(Article source: CLS)
