Bessent Dismisses Systemic Risk From AI Investment Boom

U.S. Treasury Secretary Scott Bessent dismissed concerns that the artificial intelligence investment boom poses a systemic risk to financial markets, despite investor worries about high technology valuations and debt-funded infrastructure spending.

Bessent made the remarks during a 30-minute interview with Nir Bar Dea, chief executive of Bridgewater Associates, at a New York conference organized by JPMorgan Chase and the Robin Hood Foundation. Hundreds of financial executives and investors attended the event, which was closed to journalists.

“I don’t see a systemic problem,” Bessent told Bar Dea when asked about risks linked to the rapid growth of AI investment. Technology stocks have recently experienced renewed volatility, while investors have questioned whether current valuations can be sustained.

Investors have also focused on the debt used to build data centers, expand semiconductor production and finance other AI infrastructure. A decline in AI-related stocks could increase losses for funds and institutions with exposure to the sector, particularly where borrowing financed the investments.

Bessent rejected comparisons between the current AI boom and the dotcom bubble of the late 1990s. He cited the profits generated by leading AI companies and the large personal stakes held by their founders and senior executives. He repeated his expectation that AI-driven productivity gains would provide a substantial boost to the U.S. economy.

The conference charged at least $7,500 per ticket and included hedge fund investors Stanley Druckenmiller and Steve Cohen, founder of Point72. The Robin Hood Foundation said the event raised more than $1 million for poverty relief.

Bessent’s appearance at a private event for market participants prompted questions about senior government officials speaking without journalists present. Former Treasury Secretary Janet Yellen told the Financial Times that she had consistently allowed reporters to attend her speaking engagements to avoid concerns about privileged access to market-sensitive information.

The Treasury Department defended Bessent’s participation, maintaining that his comments had previously been made in public and that the event supported charitable fundraising. Hedge funds and other institutional investors are reassessing their exposure to AI-related equities amid concerns about high valuations and the growing use of borrowing to finance investment in the sector.