More than two-thirds of investors (67%) are concerned about an artificial intelligence (AI) bubble or market correction over the next year, despite 61% expecting it to have a positive long-term impact on markets, according to the recent Janus Henderson Investor survey.
The research surveyed 1,000 affluent and high-net-worth investors in the US to gauge their views on AI investment.
A further 90% of investors expressed some concerns about AI investment, with 28% worried AI may not deliver on expectations, while close to 20% said it may be overvalued.
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However, while respondents expressed concerns over the near term, they were far more optimistic over longer time horizons, with 46% of investors expecting AI to have modest positive impacts over the next five years. Meanwhile, 15% anticipated a more major impact over that same time horizon.
This, however, was not consistent across age groups, with 31% of millennials expecting outsized returns, compared to just 8% of boomers, the research found.
Denny Fish, portfolio manager on the global technology and innovation team at Janus Henderson, said: “AI scepticism is understandable, but investors risk failing to distinguish between valuation noise and long-term structural change.
“Investors need patience and discipline, because while AI will create massive winners over time, it will also expose meaningful losers along the way.”
Another “surprising trend” is that nearly half of the respondents believed they currently have no exposure to AI. “As AI is embedded across core market and technology holdings, this is highly unlikely,” the report noted.
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“Further, 58% report discomfort with allocations to AI-related investment above 10% of their portfolio, particularly among older cohorts.”
