Charlie Munger: The Investment Genius and AI Skeptic
In 2024, Charles Thomas Munger, a titan of the financial world, was set to celebrate his 100th birthday. Until his last days, he actively contributed to his role, serving as the indispensable right-hand man to Warren Buffett and Vice Chairman of Berkshire Hathaway, a vast financial conglomerate with assets exceeding $1 trillion.
The ascent of artificial intelligence has gripped the financial world, pulling in tens of billions in investments. The ease with which leading tech companies and startups have secured funding has left many in awe.
Yet, amid this AI frenzy, there stands a legendary investor who remains unswayed and maintains a skeptical stance towards the potential value of artificial intelligence, deliberately steering clear of AI investments. That individual is none other than Charles Thomas Munger.
Munger's reluctance isn't rooted in his age or any difficulty in understanding new technologies, a common assumption about older individuals. On the contrary, Munger's analytical prowess is remarkable. His reservations stem from the excessive hype surrounding machine learning.
“I think it’s getting a huge amount of hype. And I think it’s (AI) probably getting more than it deserves,” Munger stated.
He then pointed out that humans have been leveraging artificial intelligence for a long time – its roots reach back to the 1950s when the first computers were trained to autonomously develop software.
“We’ve always had artificial intelligence, where software creates more software,” he said. “And, of course, that’s very useful, [but] we’ve had it for a long time.”
While advances in machine learning are undeniably crucial, traditional AI methodologies have proven effective in their right.
Munger also holds reservations about the lofty expectations surrounding AI, especially regarding breakthroughs in areas like medicine or other vital facets of human existence.
Artificial intelligence is not going to cure cancer. It’s not going to do everything we want done, and there’s a lot of nonsense in it, too. So I regard it as a mixed blessing,asserted the seasoned investor.
Notably, Warren Buffet echoes Munger's sentiments. While Buffet recognized the potential of generative AI, he has described tools like ChatGPT as something beyond his grasp, pointing out the possible unintended societal consequences of such technologies.
