Renowned value investing guru Jeremy Grantham warned on the “Diary of a CEO” program that the US is headed for the biggest AI investment bubble in history. By the time popular AI tech stocks arrive, they could face a drop of up to 70%—like a replay of the 2000 dot-com bubble. On Bitcoin, Grantham said he has never held it and does not recommend buying it, arguing that it lacks intrinsic value and that the price will ultimately go to zero.
AI Bubble Warning: Popular AI Tech Stocks Could Plunge 70%
In the program, Grantham said AI is a once-in-a-century major invention, comparable in importance to the internet. However, history’s biggest bubbles are often accompanied by major technological breakthroughs; irrational money rushing in has already pushed the US into the largest investment bubble in history.
He pointed out that the tech “Mag7” have poured in hundreds of billions of dollars to fight for dominance, but in the end only a few companies will survive. The bubble could burst in the next few years, and popular AI tech stocks could see declines of as much as 70%—like a repeat of the 2000 internet bubble. He also worries that if AI development runs out of control, it could trigger disastrous consequences.
Criticizing the SpaceX Narrative: South China Sea Bubble Analogy, Musk’s Narrative-Driven Fundraising Strategy
Grantham criticized SpaceX as “an extreme example of market madness,” saying that claims that it can mine asteroids or that the market size could reach one-quarter of global GDP are “nothing but nonsense.” A century from now, he said, people’s view of SpaceX will be like how modern people view the “South China Sea Bubble.”
Notably, Grantham admitted that he is an early investor in SpaceX. He said Musk is a genius at using narratives to drive valuations up—just as he did when he ran Tesla back then, sparking investor confidence and boosting valuations with “nonsense stories,” then raising funds to build factories and infrastructure.
He believes the Mars colonization plan is a “one-way ticket with no return,” and even privately hopes that some of SpaceX’s plans ultimately fail, to give humanity more time to manage the risks of uncontrolled technology.
Bitcoin to Zero Thesis: Lack of Intrinsic Value
In the cryptocurrency space, Grantham said he has never held and does not recommend buying Bitcoin. He said Bitcoin lacks intrinsic value, and its only function is to help criminals move funds—ultimately, it will absolutely go to zero. He noted that Bitcoin’s price volatility is too extreme. For example, in the short term it plummeted from $120k to $60k, making it completely unable to serve as a store of value or a medium of exchange for everyday transactions; in the long run, he said, it has even underperformed gold.
He believes Bitcoin’s biggest risk in the future may not necessarily be a crash over a short period, but rather a long-term, slow process of value leakage after market hype gradually fades. In the end, over decades, it will lose relevance and fall to zero. This is consistent with his stance in a previous interview with CNBC.
FAQ
How much does Grantham predict AI tech stocks could drop?
Grantham said on the “Diary Of A CEO” program that popular AI tech stocks could face drops of up to 70%. He compared it to a repeat of the 2000 dot-com bubble. He said the bubble could burst within the next few years because irrational capital has been flooding in and the tech “Mag7” have poured in hundreds of billions of dollars to fight for dominance, but in the end only a few companies will survive.
Why does Grantham criticize SpaceX, and what is his relationship with SpaceX?
Grantham criticized SpaceX as “an extreme example of market madness,” calling claims that it can mine asteroids or that the market size could reach one-quarter of global GDP “nonsense.” He used the “South China Sea Bubble” as an analogy. Notably, Grantham admitted that he is an early investor in SpaceX, but still believes Musk is a genius who uses “nonsense stories” to push valuations higher. He also said the Mars colonization plan is a “one-way ticket with no return.”
What is Grantham’s long-term prediction for Bitcoin’s trend?
Grantham believes Bitcoin will ultimately go to zero. He said Bitcoin lacks intrinsic value; its only function is to help criminals move funds, and its volatility is so high (dropping from $120k to $60k in the short term) that it cannot act as a store of value. He believes the biggest risk is the long, slow leakage of value after market hype fades, rather than a crash in a short period.
