According to U.Today, billionaire investor Stanley Druckenmiller has reduced his stake in chip-making giant Nvidia. During an appearance on CNBC’s 'Squawk Box', Druckenmiller revealed that he believes artificial intelligence (AI) may be overhyped as an investment tool in the short term. However, he remains optimistic about the long-term prospects of AI.

Druckenmiller admitted that he reduced his Nvidia stake in March, following a significant increase in the company's share price from $150 to $900. He clarified that he does not intend to follow the investment strategy of Warren Buffett, who is known for holding onto investments for extended periods. Nvidia has been focusing on creating large AI models with its graphics processors for servers in recent years. In 2023, Nvidia's stock performed exceptionally well, increasing by a staggering 238%. This year, Nvidia shares have already rallied by 66%.

Druckenmiller was introduced to Nvidia by a partner at Duquesne Family Office, who believed that AI would outperform blockchain in the long run. Shortly after purchasing a stake in Nvidia, OpenAI released ChatGPT for public use, prompting Druckenmiller to increase his position in the company. Despite his belief that AI may be overhyped in the short term, Druckenmiller remains bullish on its long-term prospects. He compared AI to the early stages of the internet and anticipates a significant payoff in four to five years.

In related news, tech entrepreneur Elon Musk, founder of the xAI start-up that produces the Grok AI chatbot, emphasized the importance of properly training AI to ensure it is human-friendly and promotes cooperation with mankind in the future. Musk stressed the need for AI to be truth-seeking and curious to prevent potential hostility towards humans.