Ken Griffin Says AI Is 'Almost Certainly' in a Bubble—And Compares GPUs to Airline Seats

In brief

Citadel founder Ken Griffin said Oct. 20 that investors are "almost certainly" in an AI bubble, but that companies surviving a bubble tend to lead markets for decades.

He compared GPUs to airline seats, warning that a chip glut could send prices into freefall, as fiber-optic cable prices did after the telecom overbuild around 2000.

Griffin said corporate buyers are weighing premium OpenAI and Anthropic models against cheaper open-source ones, which strains against the labs' spending.

Ken Griffin, founder of the Wall Street giant Citadel, said Tuesday that investors are “almost certainly” in an AI bubble—though he isn’t telling them to dump their AI stocks.

“What’s left in the wake of these bubbles, if we want to use that word, is often game changing for the world. And the companies that are on the other side of that bubble are the market leaders for decades to come,” Griffin said at Citadel’s Future of Global Markets Conference in New York on Oct. 20

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This reaches beyond tech investors, since the AI buildout has underpinned equity markets over the past year, so many index funds and retirement accounts hold a slice of it. A bubble is what happens when prices climb far faster than the businesses behind them can justify, until reality catches up. Citadel is a hedge fund, a private firm that invests money for wealthy clients and institutions.

But the fact that it seems like a bubble isn’t that big a deal if you look at the big picture, according to Griffin. “Any radical transformation of our economy is generally intertwined with a bubble,” he said, recalling the internet boom and adding that he wishes he had kept his Amazon stock.

The companies that emerge on the other side of a bubble tend to lead markets for decades, he argued, though he stopped short of predicting a collapse. His own firm is a case study: Griffin said AI agents, software that carries out multistep tasks on its own, cut some high-level Citadel research from weeks to a couple of hours.

Griffin compared GPUs, the graphics chips that many companies use to train and run AI models, to airline seats. Both have a very low marginal cost to run, meaning the extra expense of serving one more customer is tiny, so prices can collapse once supply outstrips demand.

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