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AI a major theme at Abu Dhabi Finance Week

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Franklin Templeton CEO likens early days of AI boom to

gold rush

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Blackstone's Schwarzman says watch electricity

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ADIC says AI is a mid-journey opportunity

By Nell Mackenzie, Tala Ramadan and Utkarsh Shetti

ABU DHABI, Dec 10 (Reuters) - Big investors attending

Abu Dhabi Finance Week voiced concern over the high valuations

attached to AI-related companies but said that investment in the

infrastructure crucial to the sector's long-term success cannot

be dismissed.

Technology leviathans such as Alphabet, Meta

and Oracle have rushed to debt markets in

recent months to keep pace in the Artificial Intelligence race,

adding to unease about an AI bubble.

For some of the most powerful personalities in finance

attending this week's state-backed finance conference in Abu

Dhabi, AI was the stand-out topic.

Here's what some of them had to say:

FRANKLIN TEMPLETON CEO JENNY JOHNSON: EARLY DAYS

Johnson characterised recent market activity and worries

about an AI-related bubble as the early days of the gold rush.

"Who cares? So, there's seven stocks. We're talking about

one of the greatest technological changes in our lifetime and

it's a bit like saying the picks and shovels (in the gold rush)

got really expensive," Johnson said on a conference panel.

"We haven't even begun to see the impact of AI," she said,

adding that it would take some years before the technology would

become transformative and meaningful enough to appear in company

earnings, echoing policymakers and economists who continue to

assess AI's impact on productivity, labour markets and corporate

earnings.

Franklin Templeton manages investments totalling about $1.7

trillion.

BLACKSTONE CEO STEPHEN SCHWARZMAN: WATCH ELECTRICITY

Trillion-dollar alternative asset manager Blackstone's

(BX.N) Schwarzman noted how AI now touches almost every part of

economic activity, with massive capital expenditure and demands

on electricity.

"We're going to have to theoretically double the size of our

electricity grid to deal with this. That's a big thing ... to

create electricity, you have to have a lot of other things

happen in society," he told the conference.

ADIC CIO FOR PUBLIC MARKETS SHIV SRINIVASAN: OPPORTUNITY

The Abu Dhabi Investment Council (ADIC) sovereign wealth

fund is among big Middle East investors that view AI-related

stocks as a good opportunity despite soaring valuations.

"I like AI and biotech, they have been big winners. I

continue to like them," said Srinivasan.

The industry is in the middle of its journey, he added.

TCI FOUNDER CHRIS HOHN: WAIT A MINUTE

Some hedge fund managers questioned how positive AI would be

on companies and their stocks.

Hohn, founder of $60 billion hedge fund TCI, said that

certain companies and investments do not make any sense at this

stage. He did not name any companies but he added that AI would

be a force of disruption and not necessarily a positive one.

"Forces of disruption are increasing," Hohn told the

conference, adding that investors' "best universe is limited and

decreasing".

Uncertainty and risk factors are "off the charts", he said.

RAJ AGRAWAL, GLOBAL HEAD OF REAL ASSETS AT KKR: THAT DATA

CENTRE DEBATE

Agrawal said that investment in the "massive opportunity"

presented by AI was best deployed in data centres.

"What you need to be cautious of is paying big multiples

that require growth in a certain period to get your capital

back," said Agrawal.

Oracle invests so heavily in its AI data centres that its

free cash flow will be negative for years, according to Visible

Alpha data last week.

Considering data centres, Khaled Al Shamlan Al Marri, chief

executive of real assets at sovereign wealth fund Mubadala

Investment Company, said its tack was to stick to its investment

principles and not chase aggressive growth.

Investment firm KKR manages $723 billion of assets.