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Klarna chief Sebastian Siemiatkowski has become the latest prominent artificial intelligence investor to warn against the tech industry’s multibillion-dollar dash to build data centres to power AI models.
Siemiatkowski — who holds shares in prominent AI companies including OpenAI, Perplexity, xAI and Cerebras through his family office Flat Capital — told the Financial Times that the huge sums being poured into computing infrastructure made him “nervous”.
“I think [OpenAI] can be very successful as a company but at the same time I’m very nervous about the size of these investments in these data centres,” he said. “That’s the particular thing that I am concerned about.”
The Klarna co-founder is an AI evangelist with his buy-now-pay-later group claiming it has used the technology to cut more than half of its workforce in recent years. An AI chatbot handles two-thirds of the company’s customer services enquiries.
The fintech, whose shares have shed more than 20 per cent of their value since the company’s $15bn IPO in New York in September, will unveil its third-quarter financial results tomorrow. But through his personal investing, the Swedish entrepreneur said he was considering hedging his exposure to companies involved in the vast infrastructure build-out.
The fintech’s shares have shed more than 20% of their value since its $15bn IPO in New York in September © Michael Nagle/Bloomberg
Just four tech groups — Alphabet, Amazon, Meta and Microsoft — announced this month a combined $112bn of capital expenditure in the third quarter.
The sector is, meanwhile, borrowing hundreds of billions to fund its expansion in AI. Lossmaking OpenAI has made total commitments worth $1.5tn on securing access to computing resources.
Siemiatkowski pointed to the popularity of ChatGPT as evidence of the widespread adoption of AI services. “[But] that’s a different thing than asking myself ‘is it worth putting a $1tn worth into servers’,” he added. “I am concerned that piling that kind of money into data centres may turn out to be not worth it.”
Siemiatkowski said he believed that less computing power to run advanced AI was needed than tech companies were planning to spend, as the models themselves were the “most effective compression technology ever invented”, which he argued could run more efficiently over time.
Stargate’s data centre under construction in Abilene, Texas, US © Kyle Grillot/Bloomberg
Chinese AI company DeepSeek jolted the markets in January after unveiling low-cost, power-efficient models. Over the past month, there has been a stock sell-off of US companies closely tied to the AI boom, partly triggered by investor concern about the huge sums spent on building the technology.
Siemiatkowski said he had raised his concerns with executives at the tech groups he invests in. “People have an incentive to say I’m wrong . . . and I feel, behind [closed] doors, people are more concerned about what I’m saying than they are in public,” he said.
The booming valuations of AI companies — chipmaker Nvidia has a market capitalisation of about $4.5tn — have also been powering the US stock market this year.
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Siemiatkowski said: “That makes me nervous, because of the amount of wealth that is currently automatically allocated into this trend, without some more thoughtful thinking.
“You can say ‘I disagree with the fact that Nvidia is worth that much and I don’t care, some rich people are going to lose some money’. But the truth is, because of the index funds and how this works, your pension right now is going into that theory that it is a good investment,” he added.
Michael Burry, the “Big Short” investor who bet against the US housing market ahead of the 2008 financial crisis, wound up his hedge fund last week after complaining that the stock market had become detached from fundamentals. His fund Scion Capital had short positions against Nvidia and Palantir.
“I partially agree with Michael Burry,” Siemiatkowski said. “The question again is about timing because he’s betting against the whole market.”