'AI is the least knowable, least predictable thing; don't take signals from the market' – Oaktree Capital's Howard Marks

What happened

Howard Marks, co-founder and co-chairman of Oaktree Capital, told CNBC investors should not take signals from market volatility during a selloff. He called artificial intelligence the least knowable and least predictable thing in his career.

Confirmed

Global impact / market context

Marks's warning suggests AI winners are hard to pick, so investors buying AI stocks face uncertainty about future products and prices. His preference for stocks over debt means bondholders earn fixed interest while stockholders can gain if the company succeeds.

Analyst inference

Oaktree is a credit firm, so it avoids direct AI company lending and instead invests in AI infrastructure through special situations. That approach limits its exposure to unpredictable AI product outcomes while still participating in the sector's buildout.

Analyst inference

What to watch

1. Marks said investors wanting AI exposure should probably buy stocks, because stocks offer large upside if things go right, while debt only pays the agreed interest and principal. Confirmed
2. Oaktree is approaching the AI sector through infrastructure investments rather than direct company lending, and is only playing in special situations, mostly. Confirmed
3. Watch whether AI-related infrastructure spending continues, since Oaktree's chosen route depends on demand for physical AI buildout rather than on which AI software company ultimately wins. Analyst inference

Evidence

• seekingalpha.com