"Master of Technology Investment" warns: AI valuations soaring "disturbingly," NVIDIA's $100 billion bet on OpenAI reminiscent of the internet bubble

James Anderson, a well-known British tech investor who gained fame for betting on NVIDIA, Tesla, and Amazon, has now issued a warning about the valuation frenzy in the AI sector.

According to a recent report by the Financial Times, James Anderson stated this week that although he had not seen obvious signs of a bubble until the last month or two, OpenAI's valuation skyrocketed from $157 billion to $500 billion in less than a year, and its competitor Anthropic's valuation nearly doubled to $170 billion in the past six months.

He believes that the scale and speed of this valuation jump are "disturbing." Furthermore, NVIDIA's plan to make a massive investment in one of its major clients, OpenAI, reminded him of the "vendor financing" model that was prevalent during the internet bubble era.

Anderson's remarks are accompanied by actual actions. The fund he manages, Lingotto Innovation Strategy, has reduced its position in NVIDIA earlier this year, even though this chip giant was the fund's largest holding.

Echoes of History: Beware of the "Vendor Financing" Model

Anderson's concerns focus on the potential $100 billion investment between NVIDIA and OpenAI.

He compared this to the history around the year 2000 when telecom equipment manufacturers heavily borrowed to finance their customers in building internet fiber networks, a model that ultimately proved unsustainable.

"I must say, the term 'vendor financing' does not bring back fond memories for someone my age," Anderson remarked. He added that while the current situation is "not exactly like the practices of many telecom suppliers in 1999-2000, it does have certain similarities."

Anderson also emphasized that he remains a "huge admirer" of NVIDIA, but this deal, criticized for its cyclical structure and uncertainty, gives him "more reason to be concerned than before."

From Top Holding to Reduction: A Shift in Investment Strategy

Anderson's warning is not mere talk; the changes in his investment portfolio reflect his cautious attitude. The Lingotto Innovation Strategy fund, which he co-manages with Morgan Samet, has downgraded its position in NVIDIA from the top spot.

Reports indicate that the fund's current largest holding has become Chinese battery manufacturer CATL. This adjustment occurred earlier this year when Lingotto reduced its stake in NVIDIA, while CATL's stock price has surged significantly since its listing in Hong Kong in May.

This stance contrasts sharply with Anderson's optimistic predictions from last year. At that time, he stated that in the most optimistic scenario, NVIDIA's market value could reach a double-digit trillion dollars. Now, this chip manufacturer has a market value of about $4.4 trillion.

Focusing on Early Investments, Positioning for Future Tracks

Despite concerns about recent AI valuations, Anderson and his team are still actively positioning themselves for early-stage technology investments. Lingotto Investment Management, established by the Agnelli family's holding company Exor, is further expanding into the early-stage technology investment sector.

Anderson's partner Morgan Samet stated that Lingotto Investment Management will now invest in startups from seed stage to post-IPO.

She added that she is particularly optimistic about opportunities in autonomous vehicles and artificial intelligence in the healthcare sector, believing that "you need to get involved earlier to figure out the future direction."