Stanley Druckenmiller cut his stake in Nvidia at the end of March and says AI may be a bit overhyped in the short term

Billionaire investor Stanley Druckenmiller revealed Tuesday that he cut his big bet on chipmaker Nvidia earlier this year, saying the rapid growth of artificial intelligence could be overdone in the near term.

“We eliminated that at the end of March, along with a lot of other positions. I just need a break. We’ve had a great run. A lot of what we recognized is now being recognized by the market.” Druckenmiller said on CNBC’s “Squawk Box.”

The notable investor, who now heads Duquesne Family Office, said he was introduced to Nvidia in the fall of 2022 by his young partner, who believed the excitement about blockchain would be more than offset by AI.

“I didn’t even know how to spell it,” Druckenmiller said. “I bought it. A month later, ChatGPT happened. Even an old guy like me could figure out what that meant, so I increased the position significantly.”

Nvidia has been the main beneficiary of the tech industry’s recent obsession with large artificial intelligence models, developed on the company’s expensive graphics processors for servers. The stock was one of the best performing stocks last year, with an increase of no less than 238%. Shares will rise another 66% in 2024.

Although Druckenmiller has downgraded his Nvidia position, he said he remains optimistic about the power of AI in the long term.

“So AI may be a little overhyped now, but it will be underhyped in the long run,” he said.

Druckenmiller once managed George Soros’ Quantum Fund and rose to fame after helping make a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.

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