According to media reports on Friday, top Wall Street hedge fund Elliott Management informed its investor clients that large tech giants, especially Nvidia, are in a bubble, with artificial intelligence technology driving their stock prices to soar violently and being overhyped.

Elliott's negative views on artificial intelligence are as follows, believing that:

Many applications are not yet ready for prime time. Many so-called uses of artificial intelligence will never effectively save costs, will never truly work properly, will consume too much energy, or will be proven to be untrustworthy.

So far, artificial intelligence has failed to deliver the promised significant increase in productivity. There are hardly any practical uses beyond summarizing meeting records, generating reports, and helping with computer coding.

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Artificial intelligence is essentially a software, and so far, it has not brought value commensurate with the hype.

In recent months, companies including Microsoft, Meta, and Amazon have been spending tens of billions of dollars to build artificial intelligence infrastructure, with most of the funds flowing to Nvidia. At the same time, many of Nvidia's largest customers are also developing their own chips. In response, Elliott questioned whether large tech companies will continue to buy Nvidia's GPUs in large quantities.

Elliott told its clients in a letter that it has essentially avoided bubble stocks, such as the "Seven Sisters." Regulatory filings show that as of the end of March, Elliott held only a small position in Nvidia, valued at about $4.5 million. As for when the market bubble will burst, Elliott said that if Nvidia reports poor performance and breaks the spell, the bubble could burst.

Although pointing out that large tech stocks are in a bubble, Elliott has also been cautious about shorting high-flying large tech stocks, saying that shorting these stocks could be "suicidal behavior."

Elliott declined to comment on the above views. Elliott Management manages about $70 billion in assets and was founded by billionaire Paul Singer in 1977. The company's performance in the first half of this year was a profit of about 4.5%, with only two years of losses since its inception.

Previously, U.S. stock chip stocks soared due to investors' enthusiasm for the potential of generative artificial intelligence, with Nvidia dominating the market for powerful processors needed to build and deploy large artificial intelligence systems, showing an even more astonishing increase. However, the current rise in these stocks has stalled, and the market is worried whether large companies will continue to invest heavily in artificial intelligence.Concerns about the sustainability of investments in artificial intelligence are sweeping Wall Street, with NVIDIA's stock price falling by more than 20% from its historical high in late June, when the company briefly became the world's most valuable company with a market capitalization of $3.3 trillion.

Despite the significant pullback, as of Friday's close, NVIDIA's stock has still risen by nearly 120% this year, and has increased by over 600% since the beginning of last year.

An article on the Wall Street Journal website points out that, looking at this earnings season, Google, Microsoft, and Amazon have successively "failed" in their financial reports. Since the release of their earnings, Google and Microsoft's stock prices have cumulatively fallen by more than 8%, and Amazon's stock fell nearly 9% in a single day, indicating that Wall Street does not believe that heavily investing in AI will bring returns. As the most obvious beneficiaries of generative AI, the cloud computing divisions of the three giants have seen steady growth in the second quarter, but this is not enough to appease investors who are increasingly eager to see returns on the substantial investments made in data centers and other AI infrastructure.

Barclays also recently pointed out that the "FOMO" (Fear of Missing Out) sentiment was fully expressed during the internet bubble in 2000, and in today's AI field, history may be repeating itself. "AI investment" is the big factory's "FOMO," yet it is expected that some will retreat next year, but in the long term, it is still in its early stages.