Paul Tudor Jones said the artificial intelligence-fueled bull market still has further to run, adding that he recently bought more related stocks as he looked for parallels to earlier tech booms.
The billionaire hedge fund manager said recent advances in AI resemble the emergence of transformative technologies such as Microsoft‘s early software dominance in the 1980s and the commercialization of the internet in the mid-1990s, periods that ushered in years of productivity gains and market upside.
“I kind of think Claude, January of this year, would be the equivalent of when Microsoft came out in ’81,” Jones said Thursday on CNBC’s “Squawk Box.”
Jones, founder and chief investment officer of Tudor Investment, further compared the current phase of AI adoption with 1995, when commercial use of the internet accelerated alongside the launch of Windows 95.
“Those were both the beginning of productivity miracles that lasted four to five and a half years,” Jones said. “We’re kind of, I’d say, 50 or 60%. If I had to pick a period, we’ve got another year or two to run.”
The stock market has surged over the past several years in part on optimism that AI will transform industries and supercharge productivity growth. Megacap technology companies tied to AI infrastructure have led the rally, helping propel the S&P 500 to repeated record highs as investors poured money into chipmakers, cloud computing firms and generative AI developers.
While AI development is in early stages, Jones said in terms of the bull market, this continues to feel like the 1999 period, about a year before dot-com share prices peaked in early 2000. When it does end, Jones said the market drawdown could be significant.
“Just imagine the stock market went up another 40%. The stock market GDP is going to probably be good lord 300%, 350%. You just know that there’ll be some … breathtaking kind of corrections,” he said.
Still, Jones said he has added to AI investments, though he did not specify when the purchases were made or which stocks he bought.
“I’m a macro trader, so I just buy baskets, and what I would simply say is, it’s a crazy, crazy time. …I love always to find historical precedents,” he said.
The high-profile investor warned about the long-term risks posed by the technology, saying governments will ultimately need to step in with regulation. Jones said he’s grown worried about the possibility of artificial intelligence becoming dangerous to humanity if left unchecked.
Jones shot to fame after he predicted and profited from the 1987 Black Monday stock market crash. He is also the chairman of nonprofit Just Capital, which ranks public U.S. companies based on social and environmental metrics.
