Unconventional wisdom: Two competing views on AI hype
The visionary vs the contrarian.
Conventional wisdom is a byproduct of groupthink that presents solutions good enough for the average person while simultaneously not being right for any individual. You follow it at your peril. Each Monday I will challenge the investing norms that just may be holding you back from living the life you want.
Unconventional wisdom: Two competing views on AI hype
“There’s a fine line between wrong and visionary. Unfortunately, you have to be a visionary to see it.”
- Dr. Sheldon Cooper
There are two recurring character types that fill the pages of history and literature.
There are the visionaries who have the foresight to see where society is going before anyone else. Ridiculed and dismissed along the way the visionary prevails when their forecasts come true.
Then there are the contrarians who stand in opposition to the crowd and steadfastly hold to their convictions.
Skepticism is widespread but there are few true contrarians who are willing to put everything on the line to back their view. As Jeff Bezos once said, contrarians are usually wrong. But those that turn out to be right are lauded.
What sets both visionaries and contrarians apart is a willingness to ignore Keyne’s adage that it is better to fail conventionally than succeed unconventionally. Most of us prefer sticking with the herd or expressing our individuality in a way that puts little at stake.
Jensen Huang and Rajiv Jain find themselves in the role of visionary and contrarian in the investing debate du jour - is this an AI bubble?
As the CEO of Nvidia Huang firmly occupies the role of visionary. Founding a company whose share price surges over 1,300% in 5 years will do that.
Jain is the contrarian and so far is paying a high price for his view. Investors are fleeing after GQG Partners’ flagship Global Equity Fund trailed the MSCI World ex-Australia index by 23.10% in 2025.
AI is the ‘dotcom bubble on steroids’
Rajiv Jain founded GQG Partners in 2016 and took the company public in Australia in 2021. He is currently the Chairman and Chief Investment Officer of the fund manager with a little more than 100 billion USD of assets under management.
This is not the first time that Jain has bet against US tech shares. In 2021 and 2022 he was proven correct and the Global Equity Fund dodged the bear market and won the Global Equities Category at the 2023 Morningstar Awards.
Jain is even more bearish on tech now. At the end of 2025 the GQG Global Equity Fund had a 1.17% allocation to the technology sector. That compares to a 30.99% allocation in the MSCI World ex-Australia index.
Many fund managers will tilt their portfolios in certain directions by under or overweighting different exposures. The approach Jain is taking may work - but it is extreme.
There is little subtlety to Jain’s view of the market. He believes that the tech sector and companies involved in the AI infrastructure build out are exhibiting dotcom levels of overvaluation. Along with high tech valuations Jain sees increasing competition, decelerating revenue growth and the collapse of free cash flow due to AI spending.
One of the hardest things for any investor to navigate is an inflection point in markets. Recency bias plays a powerful role in our world view. US tech has outperformed significantly for more than a decade and the supporting narrative is ingrained in the psyche of many investors.
Jain doesn’t believe this longstanding narrative continues to hold up. In Jain’s view US tech firms used to occupy and dominate separate niches. Now he thinks they are increasingly in direct competition.
He sees many of the tailwinds supporting growth slowing like the shift to digital advertising and transition to the cloud. He believes that the formerly scalable business models are becoming more capital intensive as AI spending continues to grow.
In short, Jain thinks the tech giants are lower quality than they have been historically and given the valuation levels he thinks other opportunities are more attractive. The Global Equity Fund is meaningfully overweight three sectors - consumer defensive, energy and utilities.
AI build out has ‘seven to eight years to go’
In a sense Jensen Huang stumbled into the role of AI visionary. When Huang founded Nvidia in a Denny’s restaurant in San Jose his original vision didn’t even contemplate AI.
Huang loved video games and thought there was a market in designing chips that enabled better graphics. Eventually Nvidia became a leader in the niche graphic processing units (“GPUs”) while most chip companies focused on the widely used central processing units (“CPUs”).
Huang started to notice that GPUs also worked best in the nascent AI industry. He was all in and has been focused on making Nvidia the AI leader since the early 2010s. It took ChatGPT for most people to pay attention.
As a supplier to companies commercialising AI, Nvidia’s fate is tied to their ability to profit from their massive infrastructure investments. In a sense Huang has become the de facto cheerleader for the companies buying Nvidia’s chips.
As others question the profitability of private start-ups Anthropic and OpenAI Huang claims they are making money and only constrained by a lack of computing power – conveniently requiring more investment in Nvidia chips.
Huang claims no company is better at AI than Meta which spent approximately 30 billion USD on Nvidia chips in 2024 and 2025.
And AI in general? Huang says it will “will revolutionize every industry, from healthcare to transportation.” That sounds like an investment opportunity you can’t afford to miss and many investors are on the bandwagon.
Taking sides in the debate
As you’ve read the summary of where Jain and Huang stand perhaps you’ve been drawn to one viewpoint. Our temperaments and experiences lend credibility to some views while making it easier to dismiss others.
My inclination is to agree with Jain. My experience of starting to invest on my own right before the dotcom crash makes me wary of visionaries preaching a limitless future. My study of market history shows there are countless times when unrealistic expectations come back to burn investors.
I may be predisposed to agree with Jain’s narrative, but I’ve learned that investing is far more nuanced than it is popularly portrayed. It isn’t about taking sides but instead listening to different perspectives and trying to figure out the best way to achieve a specific goal.
It is worth entertaining the possibility that both Jain and Huang are right. AI can be transformative but that doesn’t mean there is a linear relationship between AI adoption and the continued success of tech shares.
This has happened countless times throughout history. January 2000 was a terrible time to buy internet shares even though the internet was a revolutionary technology. In the mid-19th century a mania development over railroad shares in the UK. Shares eventually fell 80% but the railroad forever changed transport.
What should investors do when opinions are so polarised?
Once you’ve taken a side it is natural to want to do something. Try to channel that action bias in a positive direction that helps you achieve your goals. As an example I’ve outlined the way I’m thinking about this debate given my own circumstances.
I tend to agree with Jain’s view but I’m cognisant that we have different goals and constraints. Jain doesn’t need to worry about tax efficiency since his investors pay the taxes and he is evaluated using pre-tax returns.
I care about after-tax returns. Jain sold off his positions in Nvidia, Amazon and Alphabet and reduced his Microsoft holdings in 2025. I have long-standing positions in Microsoft and Apple and the tax consequences would be significant if I sell.
Given the tax situation and my continued belief in their long-term prospects I’m not selling. If I believe in a company over the long-term and it algins with my goals I need to withstand some volatility - if Jain is right it might be coming.
I bought Microsoft in 2012 when the yield was 3.50% and Apple in 2016 when the yield was over 2.00%. The dividends have grown significantly and in the last 12 months Microsoft raised their dividend 9.60% and Apple 4.00%.
The dollars I invested in 2012 and 2016 are doing their job. I’m focused on where to invest my next available dollar. It won’t be in tech but that doesn’t mean I should sell highly appreciated shares.
I would make different decisions if my circumstances were different. As a retiree worried about where my next dollar was coming from to pay for my life I would likely trim my Microsoft and Apple positions given how much they have appreciated.
The message - as always - is your circumstances matter.
Final thoughts
This swirling debate about the investment implications of AI will no doubt continue. Many opinions come with an agenda and there are countless incentives to play on investor emotions.
Here are some tips to stay grounded:
- More hype = more competition: Capital chases growth which funds additional competitors. This generally hurts long-term results as competition lowers prices and requires more spending to keep up.
- Expectations are priced into the market: Share prices are based on investor expectations of the future. Outsized returns come from exceeding expectations. The higher expectations are, the harder it is to exceed them.
- First mover advantage only goes so far: There are advantages to being first but if a company does not have a moat to hold competitors off those advantages will erode. The ultimate winners can be difficult to spot at the start of an innovation cycle.
- Context is everything: Different investors should have different strategies based on their circumstances. Focus on the approach that will give you the highest probability of getting what you want out of life.
Are you on team Huang or team Jain? Share your view by emailing me at mark.lamonica1@morningstar.com.
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