Blackstone President: The Current AI Market Is Different from the Internet Bubble Era

Glonghui, February 9th｜Jon Gray, President and Chief Operating Officer of Blackstone, recently commented on the AI sector, stating that, at least at this stage, it is not appropriate to simply equate the current market situation with the internet bubble era. He pointed out that Cisco Systems, which was among the top market cap companies in 2000, had its valuation based on extremely optimistic growth assumptions, and the "imagination space" at that time was much greater than that of Nvidia today. Data shows that Cisco's price-to-earnings ratio at its peak exceeded 100 times, while Nvidia's current price-to-earnings ratio is about 43 times. He also warned that if this trend continues for another five years, leading people to believe that "trees can grow to the sky," it will always be a risk. He believes that one benefit of the current environment is that the market is filled with a lot of negative sentiment: there are bubbles in private credit, bubbles in artificial intelligence (AI), and bubbles in the stock market; to some extent, this cautious attitude that pervades everything helps prevent situations from getting out of control.