I think investors should be extremely cautious about how they gain exposure to AI. Rather than concentrating capital in narrow or exotic AI themes, it is often wiser to favor more established, "boring" applications that have consistently demonstrated their ability to create value.
A useful reminder of the risks of overhyped themes is the wave of startups that, only a few years ago, aggressively pursued metaverse applications. Even Facebook went so far as to rename the company Meta. The outcome, however, has been largely disappointing, with significant value destruction and substantial losses across the metaverse-focused private equity landscape:
- https://futurism.com/future-society/zuckerberg-metaverse-cuts
- https://www.stantonchase.com/insights/blog/from-hype-to-bust-analyzing-the-rise-and-fall-of-the-retail-metaverse
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Carlos Salas
Portfolio Manager & Freelance Investment Research Consultant
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