(Bloomberg) -- Recent artificial intelligence related market stumbles have somewhat burst the bubble of infallibility around the sector, Howard Marks, co-chair of Oaktree Capital Management LP, said in an interview with Bloomberg TV.
“I think that now people are saying, hold on, wait a minute, let’s be a little more thoughtful, let’s be a little more skeptical,” Marks, who wrote in a note last year that he was on bubble watch, said. “That’s very healthy,” he added.
Marks’s comments come as investors are showing less tolerance for tech companies whose core businesses are cooling beneath an unprecedented AI spending spree. Recent results from Alphabet Inc. and Amazon.com Inc. have fueled concerns that AI is eroding the businesses financing those investments.
“Over the last couple of years, there has been great excitement and eagerness surrounding buying into or lending to AI, and so that’s that’s been a crowded trade,” Marks said.
If you think you’re in the later innings and everybody’s excited about it, it’s been done a lot, Marks added. “The standards have come down, prices have gone up. You have to be cautious in what you do,” he said.