Cathie Wood, Chief Executive Officer of Ark Investment Management LLC, attends the Federal Reserve Board’s Payments Innovation Conference on Tuesday, October 21, 2025 in Washington, DC, USA.
Aaron Schertz | Bloomberg | Getty Images
ARK Invest CEO Cathie Wood on Tuesday dismissed concerns of an artificial intelligence bubble while warning of a potential “reality test” on artificial intelligence valuations.
Speaking to CNBC’s Dan Murphy on the sidelines of Saudi Arabia’s Future Investment Initiative (FII) in Riyadh, Wood said there would be “tremors” in the market if interest rates start rising.
“There will be a moment next year when the discussion shifts from lower rates to higher rates,” said one closely watched investor.
“There are a lot of people out there who think that innovation and interest rates are inversely related, and if you look at history, that’s just not true,” Wood said.
“I’d like to eliminate that notion from people, but I still think there’s a reality check given the way algorithms work these days.”
Her comments come amid concerns that both companies and investors will pour money into the space, driving up valuations for the technology.
Wood is one of many business leaders who have weighed in on the AI bubble discussion, especially as AI-driven spending is leading to record deals and valuations.
Earlier this month, the International Monetary Fund and the Bank of England became the latest financial institutions to warn that global stock markets could be in trouble if investor appetite for artificial intelligence deteriorates.
At the time, IMF chief Kristalina Georgieva gave investors some frank advice: “Brace yourself. Uncertainty is the new normal, and it will continue to be.”
She joined OpenAI’s Sam Altman, JPMorgan President Jamie Dimon, Federal Reserve Chairman Jerome Powell and others to warn of the risk of a stock market correction due to the surge in AI spending.
Wood: AI is not in a bubble.
But Ark Invest’s Wood said that over the long term, Big Tech’s valuations will become more reasonable.
“I’m not saying there will never be a fix. Of course, there will be a fix, as many people are worried about: ‘Okay, is this too much, too soon?’ But if our expectations for AI, especially the kind of embodied AI I just described, are correct, we are at the very beginning of a technology revolution,” Wood said.
Asked if AI is currently in a bubble, Wood said: “I don’t think AI is in a bubble. I think on the corporate side, it’s going to take a while for large companies to be ready to change.”
He added: “To really take advantage of the productivity gains that we think AI will bring, we’re going to need companies like Palantir to step into the largest companies and really restructure them.”
Global markets rose earlier this week, with investors buoyed by hopes that the United States and China could soon reach a deal on trade issues. US stocks hit new highs on Monday, and Asian markets also posted solid gains.
Investors are closely monitoring a number of important market catalysts, including Big Tech earnings and the Federal Reserve’s interest rate decisions. The US central bank is widely expected to cut interest rates for the second time this year.
