Citadel’s Ken Griffin has a warning about artificial intelligence. The billionaire said investors are “almost certainly” in the midst of an AI bubble as many companies still grapple with how much they will spend on the technology and how it will transform the economy.
The timing of his “bubble” call is notable. Three months ago, Citadel bought the public stock book of one of Wall Street’s most aggressive AI funds near the bottom of a brutal selloff.
- SNDK stock is moving. See the real-time price action here.
Griffin, speaking Tuesday at Citadel’s Future of Global Markets Conference in New York, framed bubbles as a feature of major economic shifts.
“Any radical transformation of our economy is generally intertwined with a bubble,” he said, per CNBC. He added corporate America has been uneven in pulling value from AI models, and businesses are scrutinizing what they spend on services from OpenAI and Anthropic.
The Fire Sale
Situational Awareness, an AI-focused hedge fund founded by former OpenAI researcher Leopold Aschenbrenner, sold its entire public equities portfolio to Citadel in late July.
The fund’s five largest disclosed holdings at the end of June, according to a 13F filing, were:
- Sandisk Corp. (NASDAQ:SNDK)
- Micron Technology Inc. (NASDAQ:MU)
- Bloom Energy Corp. (NYSE:BE)
- Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM)
- Nebius Group N.V. (NASDAQ:NBIS)
Griffin Bought the Dip
Griffin spoke directly with Aschenbrenner and spent a night reviewing the fund’s trading positions and their liquidity alongside top Citadel executives, Reuters reported.
They made a deal, and the bet paid off on timing. In an August letter, Griffin told clients Citadel had unwound more than 80% of the risk tied to the portfolio.
After Citadel stepped in, the AI trade rebounded, with the sale marking a bottom for the selloff that started in June.
Aschenbrenner is back, too. Situational Awareness has been buying options in Advanced Micro Devices (NASDAQ:AMD), SK Hynix (NYSE:SKHY) and CoreWeave (NASDAQ:CRWV). The fund held onto stakes in private companies like Anthropic.
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What Comes Next
Griffin’s bubble call lands ahead of the biggest AI listing yet. Anthropic reported a net loss of $42 billion in 2025 and plans to spend $518 billion on cloud, computing and infrastructure obligations, according to its IPO prospectus seen by Reuters.
The debut is likely to come after the November U.S. midterm elections.
The Bottom Line
Griffin profited by buying AI stocks from a forced seller. His latest comments suggest he expects more sellers before the cycle ends.
Photo: USA TODAY Network via Reuters Connect
