Daniel Loeb's next task as his hedge fund turns 30: Avoiding becoming 'AI roadkill'
Daniel Loeb has found himself a new goal as his hedge fund Third Point entered its milestone 30th year: To be a true winner in the red-hot artificial intelligence boom and not run over by it. "Change is happening at an ever accelerating and increasing rate and it's just going to require us to continue to be even more nimble, and to use AI as your own tool to stay on top of what's going on," Loeb told CNBC's Scott Wapner at Third Point's investor day Thursday. "You'll either be a beneficiary of AI or AI roadkill. So I think we all need to do our best to not be the latter." AI has dominated Wall Street's investing theme over the past two years as investors left and right seek to hit home runs in the space, from chipmakers to hardware producers to car companies and utilities. Loeb, once known for his sharp brand of activism, has emerged as a big AI bull in recent years, increasing his fund's AI exposure to nearly half of its equity portfolio in 2024. Ways Loeb is playing AI The hedge-fund investor not only owns "legacy" companies like Meta , Nvidia , Microsoft and Amazon — which he said have built enormous competitive advantages — but he is also betting on AI beneficiary London Stock Exchange Group and chipmaker Taiwan Semiconductor Manufacturing . "It's a pervasive component of our research process... It's a variable in which we benchmark all of the companies that we invest in, both in terms of how they're using it… whether it's cloud companies or Amazons or Microsofts and how they're directly benefiting from it," Loeb said. Three decades ago, Loeb started Third Point with $3.2 million cobbled together from friends and family. Today, the hedge fund touts over $20 billion assets under management and net returns of 15% since inception, weathering the dotcom crash, the 2008 financial crisis and the Covid pandemic. Known for being one of the best activist investors ever, he's grown the firm to include a significant credit and venture business. On today's market environment, Loeb believes the short-term uncertainty will start to fade by next year and investors picking quality, growth stocks with fair prices will be rewarded in the long run. "I think it will be ok.. I think we'll start looking towards a better, more predictable 2026," Loeb said. "I think there will definitely be winners and losers. The economy will grow at about a one-percent rate unless something comes out of left field, so I think it's a good environment for investing in growthy companies at good valuations." He also revealed that Third Point got back into US Steel a month or so ago in the $30s range in a bet that its path to a deal with Nippon Steel would materialize. CNBC reported this week that Nippon is expected to close acquisition of U.S. Steel at $55 per share.
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