The rapid rise of China’s DeepSeek artificial intelligence group is seen as positive for the sector, according to billionaire hedge fund manager Steve Cohen, who attributed the recent drop in tech stocks to misinformation.
Cohen expressed optimism about the advancements made by DeepSeek, stating that they contribute to the development of artificial superintelligence, which he believes is approaching quickly. At a hedge fund conference in Miami, he referenced AI models that could one day surpass human cognitive capabilities.
Cohen’s hedge fund, Point72, has initiated a new strategy focused on trading AI-related assets, including semiconductor hardware, under the name Turion Fund, inspired by mathematician Alan Turing. Managing around $1.5 billion, Point72 is part of the growing trend of hedge funds investing in AI technology.
During the conference, Cohen noted that misinformation can mislead both investors and the public, which he suggested played a role in the market’s recent fluctuations. He downplayed the significant dip in Monday’s market, where Nvidia, a key player in AI stocks, dropped around 17% before rebounding nearly 9% on Tuesday as investors returned to the stock following the unveiling of DeepSeek’s new model, which purportedly achieved a technological breakthrough at a lower cost compared to its American counterparts.
Cohen emphasized a long-term perspective on AI’s impact on the market, describing it as a transformative force that will influence various aspects of life and business. He acknowledged that there will be periods of doubt, but insisted that many investors may not fully understand their investments in these technologies.
Although Cohen reduced his trading activities at Point72 last year, he continues to serve as the CEO, driving business strategy and talent management.
Point72 operates as a multi-manager hedge fund, akin to Citadel and Millennium, employing 185 investment teams across a range of trading strategies, including equities and macro trading. Cohen, who is also the owner of the New York Mets, remarked on his changing priorities as he approaches 70, recognizing that his initial vision of being hands-on in trading may need to shift.
photo credit: www.ft.com
