Howard Marks has a question for markets dazzled by artificial intelligence: what if the technology succeeds, but the people who financed it do not?
The Oaktree co-founder’s latest memo does not dispute AI’s transformative potential. He calls it possibly one of the most consequential developments the world has seen. His concern is narrower, and more uncomfortable for investors: a technology can reshape the economy while leaving its backers with disappointing returns.
“Transformative technologies don’t necessarily reward investors,” Marks writes, invoking Warren Buffett’s warning about the internet during the dot-com bubble. The internet changed commerce, communication and entertainment. It did not make every internet investor rich.
AI’s influence on equities is no longer subtle. J.P. Morgan estimates that 42 AI-related companies generated roughly two-thirds of the S&P 500’s price gains between January 2024 and late 2026. The same basket accounts for a disproportionate share of index earnings growth and capital spending.
That concentration has turned AI from a sector allocation into something closer to a market-wide dependency. A portfolio that owns the S&P 500 through an index fund, a pension plan or a diversified equity strategy may already carry substantial exposure to a handful of chipmakers, hyperscalers and AI-linked firms, even if it owns no “AI stock” directly.