Howard Marks, co-founder and co-chairman of Oaktree Capital Management, stated that current AI market conditions do not yet constitute a classic bubble. In his December 2025 memo, he noted that AI stocks drove a significant portion of S&P 500 gains, while seed funding for unproven startups exceeded $1 billion.
Marks distinguishes between a mean-reverting bubble and an inflection bubble. He defines the latter as a phenomenon driven by genuine technological shifts that may reshape the economy. In his February 2026 memo, he suggested that AI could evolve from a productivity tool into a labor substitute.
Despite his view on the technology's potential, Marks cautioned that current AI investments might not be fairly priced. He advised investors to maintain a balanced approach, avoiding both complete withdrawal from the sector and aggressive all-in strategies, while noting risks of job losses during market corrections.
