Ark Invest CEO Cathie Wood dismissed concerns of an AI bubble, but warned of a potential “reality check” as market valuations climb. Speaking at Saudi Arabia’s Future Investment Initiative (FII) in Riyadh, Wood said rising interest rates could trigger short-term market volatility.
“We’ll soon shift from talking about lower rates to rising ones,” she told CNBC, adding that innovation and interest rates are not inversely correlated over time. However, she expects current trading algorithms could cause a temporary correction as investors reassess AI’s value.
Her comments follow growing warnings from global institutions like the IMF and Bank of England, which recently cautioned that overexcitement around AI could pose risks to stock markets.
Despite these concerns, Wood maintained that AI valuations will make sense long term, saying: “We’re at the very beginning of a technology revolution.” She also noted that widespread adoption will take time as large enterprises adapt to AI transformation, citing Palantir as an example of firms leading the charge.
Markets have rallied this week, supported by optimism around U.S.-China trade talks and expectations of another Fed rate cut.