Steve Cohen predicts AI transformation will take decades amidst volatility

In Miami Beach, Florida, billionaire investor Steve Cohen discussed the long-term potential of artificial intelligence during the iConnections Global Alts conference. He emphasized that the AI boom is not a straight line but is characterized by fluctuations, primarily due to misinformation and market reactions. Notably, the emergence of DeepSeek, a Chinese AI startup, caused a significant decline in U.S. technology stocks, with Nvidia experiencing its largest one-day drop in value, falling 17% and losing nearly $600 billion in market capitalization. Cohen remarked on the importance of understanding investments related to AI, as many investors seem unsure of their rationale behind owning these stocks. Cohen, who leads the hedge fund Point72 and owns the New York Mets, stated that while there will be substantial growth opportunities in AI, investors should brace for episodic advancements followed by quiet periods. He asserted that the AI narrative has tremendous implications, affecting both personal and business domains over time. In light of these predictions, Cohen also revealed that Point72 has successfully raised $1.5 billion for a new hedge fund dedicated to AI investments, indicating confidence in the sector despite current market volatility. The conflicting performance of tech stocks, as seen with Nvidia's rebound by 7% the day following the drop, illustrates the cyclical nature of the AI investment climate. Cohen cautioned that lack of solid information amid investor anxiety can lead to misguided decisions, thereby promoting volatility in AI-related securities. Potential advancements in AI are more than just short-term trends; they signify a fundamental change in how economies and industries operate, a transition Cohen believes is still in its early stages. Overall, Cohen's comments reflect a bullish stance on the future of artificial intelligence, even as investors contend with significant challenges and uncertainties that will undoubtedly arise in this evolving landscape. The long-term outlook for AI is positioned as a major theme for the next 10 to 20 years, making it imperative for investors to maintain a clear understanding of their investments and the underlying technologies driving this revolution.