Billionaire investor Michael Novogratz has described artificial intelligence (AI) as the "biggest bubble of our lifetime," urging investors to increase their exposure despite concerns about market risks. Speaking on Tuesday at the Greenwich Economic Forum in Connecticut, Novogratz expressed confidence that the current surge in AI-linked stocks has not yet reached a dramatic peak typical of financial bubbles.

Novogratz pointed to the recent performance of AI-focused companies, highlighting Nvidia Corp, whose market capitalization neared $6 trillion, as a key driver behind the S&P 500 index reaching record highs. He acknowledged challenges such as rising long-term borrowing costs but maintained that these factors are unlikely to halt the upward momentum in the sector.

“Bubbles don’t end like we are today,” Novogratz said, suggesting that the market’s behavior does not yet resemble the collapse phase of previous bubbles. He added that AI stocks appear undervalued when measured by price-to-earnings ratios, signaling further growth potential. “If you were not invested in AI, you might as well just go home and put your head in a bucket of ice,” he commented.

Novogratz’s firm, Galaxy Digital Inc, operates in both cryptocurrency and AI infrastructure sectors. The company engages in trading, lending, market making, venture capital investments, and bitcoin mining. Recently, Galaxy Digital has begun adapting some of its mining infrastructure to support AI computational demands, reflecting a strategic shift toward the AI market.

The acceleration of AI development is also influencing regulatory and geopolitical considerations, Novogratz said. He noted bipartisan political support in the United States driven by concerns over China’s progress in AI, which is seen as a potential existential challenge. This dynamic, he argued, will likely limit efforts to impose significant restrictions on AI advancement, even among those involved in developing the technology.

On the cryptocurrency front, Novogratz remains cautiously optimistic. He pointed to a rebound in bitcoin prices from mid-year lows, with bitcoin trading at about $83,000 on Wednesday, though still below its peak of $126,000 reached the previous year. At the same time, he noted increasing uncertainty around government debt markets as a factor that could support strength in crypto assets.

Overall, Novogratz’s remarks underscore the prevailing enthusiasm among some investors toward AI and digital assets, framing both as sectors with considerable growth potential despite broader economic headwinds.