JPMorgan Vice Chairman: AI Sector Valuations Remain High, Correction Expected

JPMorgan Vice Chairman Daniel Pinto believes that valuations in the AI sector are still too high and expects a correction in the industry. Speaking at a panel discussion at the International Financial Leaders Investment Summit hosted by the Hong Kong Monetary Authority, Pinto said he does believe there will be a significant wave of productivity gains and that AI will have a major impact. But he cautioned that the pace of growth should be viewed prudently, because ultimately someone has to pay for all the things currently being developed. Industries outside AI and everyone else will have to pay these companies trillions of dollars to justify these investments. He said AI companies need to prove that such a massive scale of investment and current valuations are justified, and the current pace may be a bit too fast. Pinto said the AI industry may see a "correction." He said that compared with these companies' current market prices, market expectations for their revenue and profit growth may be somewhat too steep, which could lead to a repricing of the entire industry.