Oaktree Capital Co-Founder Says Investors Underestimate Impact of Artificial Intelligence

MaticHoleFiller · 2026-03-20T09:50:09+00:00

Howard Marks of Oaktree Capital believes that artificial intelligence makes the world more unpredictable, and investors should be more cautious about AI investments. He points out that new technologies are prone to creating bubbles, and underestimating AI's impact could lead to misjudgments, such as the mass layoffs at Block. He recommends that investors should participate as owners rather than merely as lenders.

MaticHoleFiller

2026-03-20 09:50:09

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Oaktree Capital Co-Founder Howard Marks says artificial intelligence (AI) is making the world more unpredictable than ever before.

“Most investors decide their course of action based on their judgment of future conditions,” Marks said in an interview at the Capital Markets Industry Conference in New York on Tuesday. “That’s not enough,” he added.

He noted that the power given to AI also makes it impossible to predict what it will or won’t do, and to what extent it will replace human jobs. AI has also raised concerns among investors about private markets and their relative lack of transparency.

Marks said he has been in the industry long enough to witness many cycles of innovation’s rise and fall.

“New things can inspire people’s imagination and are easy to market to the public, but because they are new, people haven’t yet seen their flaws in practical applications,” he pointed out. “Historically, there has never been a steel bubble or a hamburger bubble. When bubbles do occur, they are often driven by new technologies or financial innovations,” Marks said. He believes investors should buy stocks of AI-focused companies rather than lend money to them.

“If you’re taking on the risks of a basic business model, shouldn’t you earn returns as an owner rather than as a fixed-income investor?” he asked.

Marks also said people underestimate AI’s impact, citing last month’s announcement by Jack Dorsey’s Block of layoffs of 4,000 employees, about half of its workforce.

“How many people in the world understand the significance of this?” he asked.

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