Howard Marks Says AI Race Is Overheated, Ultimate Winners Hard to Predict

Source

Korea Economic Daily

Summary

Howard Marks said investing in AI companies is like buying a lottery ticket and cautioned against aggressively chasing the rally because it is hard to predict the ultimate winners.
He said it is impossible to know whether the current enthusiasm is irrational overheating until AI company profits become clear, adding that OpenAI and Anthropic IPOs in the second half of this year will be a key gauge of investor sentiment.
Marks said that even amid a hyperscaler arms race, investors should focus on companies that use AI to improve productivity and efficiency, and that for now a wait-and-see approach lowers the risk of ending up among the losers.

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Korea Investment Week

Howard Marks, chairman of Oaktree Capital Management, and Yoon Seok-mo, head of research at Samsung Securities' research center, speak on "The AI Era: Market Cycles, Risk, and a Korean Perspective" at the Shilla Seoul in Seoul's Jangchung-dong on May 14, the third day of Korea Investment Week 2026. Photo: Moon Kyung-duk, Korea Economic Daily

"Investing in artificial intelligence companies is like buying a lottery ticket. Thousands of people buy lottery tickets every day, but most lose money and only a tiny handful become rich overnight."

Howard Marks, co-founder and chairman of Oaktree Capital Management, said this on May 14 at Korea Investment Week 2026 at the Shilla Seoul in Seoul's Jangchung-dong. He said investors should be cautious about aggressively chasing AI-related gains because, despite the industry's growth potential, it remains difficult to predict who will ultimately come out on top.

Until it becomes clear how much profit AI companies can generate, there is no way to know whether the current enthusiasm amounts to irrational overheating, Marks said. He added that initial public offerings by major AI companies such as OpenAI and Anthropic in the second half of this year will be an important gauge of investor sentiment.

Marks also stressed that technological innovation does not automatically translate into investor returns. Amazon and Microsoft are effectively engaged in an arms race to secure AI leadership, he said. Even if the market develops into a winner-takes-all structure, no one may make much money if competitors keep cutting prices. Still, investors could post strong results by identifying companies that use AI to raise productivity and efficiency and improve the quality of products and services. For now, staying on the sidelines is also a prudent and safe approach, he added. That may mean missing out on a big opportunity, but it lowers the odds of ending up among the losers.

Kim Jung-soo, vice chair of Samyang Foods, also spoke at the event and described the drivers of Buldak Bokkeum Myeon's global success. Samyang Foods earned the nickname "Noodvidia" because it thought deeply about the future and chose a path others had not, Kim said. When an intense first experience becomes a repeatable habit, a brand turns into a culture, she added.

Jeon Ye-jin, Yang Ji-yoon and Ko Eun-yi, Korea Economic Daily reporters ace@hankyung.com