May 10, 2026
Billionaire investor Paul Tudor Jones recently told CNBC that advances in AI remind him of Microsoft's rise in the 1980s and the pre-dotcom-bubble of the 90s.
"I kind of think Claude [in] January of this year, would be the equivalent of when Microsoft came out in '81," Jones said on CNBC's "Squawk Box" (1).
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Jones also says he expects a market correction, saying, "You just know that there'll be some ... breathtaking kind of corrections." And yet, Jones says he's still adding to his AI investments, though he did not say which specific stocks he's investing in.
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Why would a well-known investor say he expects a correction yet still invests? There's one missing element — time.
Jones predicts the AI market has "another year or two to run"
Jones first rose to prominence after he predicted the 1987 Black Monday crash, which wiped out trillions of dollars in market value worldwide. The New York Stock Exchange lost more than $500 billion in market capitalization (2) — the largest decline since 1914. But while investors and the media scrambled, Jones shorted the market and profited an estimated $100 million (3).
Today, Jones says the bull market for AI likely has "another year or two to run," adding that he recently purchased more AI stocks. However, he warns about the long-term risks of the technology, saying governments should step in with regulations. He's also said he's worried AI could become dangerous in the future.
Jones compares the current AI moment to 1995, when commercial internet use exploded alongside the launch of Windows 95.
He says those kinds of "transformative" technological shifts and "productivity miracles" typically "lasted four to five and a half years" — and by his estimate, we're about 50-60% through this one. That means, in his view, the window isn't closed for investors. It's just not wide open forever.
It's also worth noting that the risk of an AI bubble could be worse than that of the dotcom bubble.
"The share of the economy devoted to AI investment is nearly a third greater than the share of the economy devoted to internet related investments back during the dotcom bubble," said Jared Bernstein (4), former Council of Economic Advisers chair.
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And, similar to the dotcom bubble, most AI companies are not profitable. Anthropic hopes to be profitable by 2028 (5), while OpenAI CEO Sam Altman reported that its infrastructure costs could reach as high as $1.4 trillion (6) over the next eight years — and the company is estimated to reach profitability in 2030 (7).
For everyday investors, that raises a question: How do you ride a bull market you know will eventually end?
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How to invest in AI without overexposure
Most of us aren't billionaire hedge fund investors with a full team behind us. So how can you get in on the action? Here's how to take a measured approach.
Stick to ETFs if you're not a stock expert
Unless you spend hours researching balance sheets, an exchange-traded fund (ETF) is often a smarter bet than picking individual stocks. An ETF is a basket of securities that trades like a single stock. Several ETFs track AI and tech-focused companies, like the Global X Artificial Intelligence & Technology ETF (AIQ) (8) or the iShares Expanded Tech Sector ETF (IGM) (9), give you broad exposure without betting everything on one company.
Don't go all in on AI
Even if Jones is right that the AI rally has legs, the risk is real. If your portfolio is heavily weighted toward AI or tech stocks, even a temporary correction could hit your portfolio hard. Most financial advisors recommend keeping any single sector to no more than 20% (10) of your overall portfolio. Balance your portfolio by investing the rest in other industries, bonds, or CDs.
Stay clear of overly-hyped stocks
Every bull market attracts its share of speculative bets. During the dot-com boom, investors poured money into companies with no clear path to profit and many lost everything when the bubble burst. Today, that same dynamic could play out with some AI companies or so-called meme stocks (11). Jones himself has warned that the eventual correction could be "breathtaking." Chasing hype is how ordinary investors end up holding the bag when it proves to be just that — hype.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
CNBC (1),(4); Goldman Sachs (2); Yahoo Finance (3),(7),(10); DigiTimes (5),(6); Global X ETFs (8); iShares (9); Fidelity (11)
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Danielle is a personal finance writer whose work has appeared in publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love. She’s especially passionate about helping families and kids learn smart money habits early.
