Billionaire investor Stanley Druckenmiller revealed on Tuesday that he reduced his big investment in chipmaker Nvidia earlier this year. He thinks the rapid growth of artificial intelligence (AI) might be too much for now.
“We cut that and many other investments in late March. I just needed a break. We’ve had a great run. Many things we spotted are now well-known in the market,” Druckenmiller said on CNBC’s “Squawk Box.”
Druckenmiller explained that he decreased his investment after seeing Nvidia’s stock price go from $150 to $900. He joked, “I’m not Warren Buffett — I don’t hold onto things for 10 or 20 years. I wish I was Warren Buffett.”
Nvidia has been doing very well lately because of the tech industry’s focus on large AI models. These models use Nvidia’s expensive graphics processors for servers. The stock was one of the best performers last year, going up by a huge 238%. In 2024, it’s already up by another 66%.
Druckenmiller first learned about Nvidia from his young partner in the fall of 2022. His partner believed that the excitement about blockchain would be overshadowed by AI.
“I didn’t even know how to spell it,” Druckenmiller said. “I bought it. Then a month later, ChatGPT happened. Even an old guy like me could figure out okay, what that meant, so I increased the position substantially.”
Even though Druckenmiller has reduced his Nvidia investment this year, he still believes in AI’s long-term potential.
“So AI might be a bit overhyped now, but underhyped in the long term,” he said. “AI could be like the Internet. As we spend a lot on it, we need to see the payoff as it comes in day by day. The big payoff might be four to five years from now.”
Druckenmiller has also invested in Microsoft and Alphabet as AI plays over the past year.
He became famous for making a $10 billion bet against the British pound in 1992 while managing George Soros’ Quantum Fund. Later, he oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.
