Citadel's Ken Griffin said investors are almost certainly experiencing an artificial intelligence bubble while companies assess spending on AI and the technology's economic effects. Griffin spoke Tuesday at Citadel's Future of Global Markets Conference in New York. CNBC reported that Griffin described bubbles as generally accompanying radical economic transformations. Griffin said companies have achieved uneven results from AI models. Griffin said businesses are examining spending on services supplied by OpenAI and Anthropic.
The warning came three months after Citadel bought an aggressive AI fund's public stock portfolio near the bottom of a sharp selloff. Situational Awareness sold Citadel the fund's entire public equities portfolio in late July. Former OpenAI researcher Leopold Aschenbrenner founded the AI-focused hedge fund. A 13F filing listed Situational Awareness's five largest disclosed holdings at June's end as Sandisk, Micron Technology, Bloom Energy, Taiwan Semiconductor Manufacturing and Nebius Group.
Reuters reported that Griffin spoke directly with Aschenbrenner before the transaction. Reuters reported that Griffin and senior Citadel executives spent a night examining the fund's positions and liquidity. Griffin told clients in an August letter that Citadel had unwound more than 80% of the risk associated with the portfolio. AI stocks recovered after Citadel's purchase, and the sale marked the low of the selloff that began in June. Griffin made a profit from buying AI stocks from a forced seller.
Situational Awareness has resumed buying options in Advanced Micro Devices, SK Hynix and CoreWeave. The fund retained investments in private companies, including Anthropic.
Griffin's warning precedes what would be the largest AI listing yet. Anthropic's IPO prospectus, seen by Reuters, reported a net loss of $42 billion in 2025. The prospectus outlined planned spending of $518 billion on cloud, computing and infrastructure obligations. Anthropic's market debut will likely follow the November U.S. midterm elections. Griffin's latest remarks suggest Griffin expects additional sellers before the cycle ends.
Citadel's Ken Griffin Warns of AI Bubble Amid Market Volatility
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Summary
Citadel’s Ken Griffin cited market trends showing an AI bubble, pointing to mixed business results and ongoing spending reviews. The comments followed Citadel’s purchase of an AI fund’s public stock portfolio during a selloff. Griffin said Citadel reduced over 80% of the portfolio’s risk. AI stocks hit a low before rebounding. Anthropic’s IPO filing showed a $42 billion 2025 net loss and $518 billion in infrastructure spending. Volatility indicators remain key for traders tracking the sector.
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