Bessent dismisses AI systemic risk at closed-door hedge fund event

Treasury Secretary Scott Bessent told a closed-door New York hedge fund conference that he saw no systemic problem in the AI investment boom, Hedgeweek reported on Oct. 22, citing the Financial Times.

Bessent, a former hedge fund manager, gave the view in a 30-minute interview with Bridgewater Associates CEO Nir Bar Dea before hundreds of financial executives and investors. "I don't see a systemic problem," he said, according to the report, adding that he saw no evidence of systemic vulnerabilities tied to the surge in AI investment. He rejected dotcom-bubble comparisons, pointing to the profitability of leading AI companies and the personal stakes their founders and executives hold, and repeated his expectation that AI-driven productivity gains would give the US economy a significant boost.

For allocators weighing AI-linked exposure, the report leaves two checkable variables: stretched technology valuations and the growing debt being raised to fund data centers and semiconductor infrastructure. Hedge fund and institutional investors are already reassessing AI-linked equities over concern that elevated valuations and increasingly leveraged investment could amplify losses in a broader correction, Hedgeweek said.

The event was organized by JPMorgan Chase and the Robin Hood Foundation, the charity founded by Paul Tudor Jones, and raised more than $1 million for poverty relief, according to the Treasury Department. Stanley Druckenmiller and Point72 founder Steve Cohen attended, Hedgeweek said.

The event was closed to journalists and tickets cost at least $7,500. The account rests on the FT's reporting and on the Treasury Department's statement that Bessent's remarks had been made publicly before. Hedgeweek said the appearance raised questions about senior government officials addressing market participants in private. Janet Yellen, a former Treasury Secretary, told the FT she had consistently ensured journalists could attend her speaking engagements to avoid perceptions of privileged access to market-sensitive information.