Jeremy Grantham has spent five decades calling market bubbles before anyone else wanted to hear it. Now he has a warning for investors still betting that AI will mint a new generation of tech monopolies: the exact opposite is happening.
“We have gone from a monopoly world to a brutal competitive world,” Grantham said in a recent appearance on the Excess Returns podcast. “And we will stay there for years and there will be blood in the streets.”
The GMO co-founder and market historian argues that the Magnificent 7—the mega-cap tech giants that powered Wall Street’s AI-fueled rally—built their dominance over the past two decades in an unusual era of antitrust permissiveness. Regulators stood down, competition was crushed or acquired, and profit margins swelled to levels with few historical precedents. That window, he says, is closing fast.
The culprit is AI itself.
What’s easy to forget, Grantham previously told Fortune, is that the AI boom didn’t arrive into a healthy market. The S&P 500 had already fallen roughly 25% from January through October 2022—a correction quietly underway—when ChatGPT launched and the Magnificent 7 “lifted the market on its broad shoulders and staggered forward,” as Grantham told Fortune in April. In his view, the AI frenzy didn’t fix the underlying problem. It deferred it while making it larger: a fresh speculative frenzy injected on top of an already overvalued system.
