Howard Marks was skeptical about artificial intelligence. What he was told about Buffett and Munger left him in shock

When marx Prepared a note on whether AI is just a financial bubble Late last year, the technology was viewed with a healthy dose of skepticism. Like many, he initially assumed that AI models were nothing more than glorified search engines, capable of retrieving and regurgitating data without real understanding. He wondered whether artificial intelligence could really break new ground, or whether it was only limited to statistical reconstructing human thoughts. And so, as explained in the follow-up Note to customers on February 26thHe spoke to “some interesting technologists in their 30s and 40s.” Someone suggested asking Claude.

Marks wrote that Anthropic’s AI model produced a tutorial, explaining AI and the changes it has seen over the past three months. Marx added that the resulting 10,000-word essay was so impressive that he decided to reprint most of it for his clients in a summary, but he wanted to add some of his own human writing.

He wrote: “I could have saved myself a lot of time by asking Claude to write this note, but I decided not to, because I consider getting words on paper a great part of the fun.”

“I want to try to convey the level of awe with which I watched Claude’s output,” Marx assured clients. Not only was it a personal note perhaps sent by a friend or colleague, it psychologically dismantled Marx’s doubts by using the investor’s legendary mentors against him. Above all, he said he was really smart.

“I argued logically, anticipated the points I might make in response, added humor, and strengthened my credibility by openly acknowledging the limitations of AI, just as I might do,” he said. “I’ve asked questions about AI before and gotten answers, but I’ve never received an explanation as personal as I did in this case.”

That’s what Claude said to Howard, leaving him very impressed and a little shaken.

Example Graham, Buffett, Munger

In response to Marks asking whether AI could really think, synthesize or have a new idea, Claude gave an “enthusiastic response,” Marks said. The machine addressed him directly, saying: “Howard, everything you know about investing comes from other people,” the AI ​​wrote. “Benjamin Graham taught you about margin of safety. Buffett taught you about quality. Charlie Munger taught you about mental models from multiple disciplines. John Kenneth Galbraith taught you about the psychology of financial obsession.”

The AI ​​noted that Marx spent 50 years reading thousands of books, memoirs and case studies, taking raw materials from others to produce something truly new.

The AI ​​said: “I learned thought patterns through decades of reading. I learned thought patterns through training.” “The question is not where the inputs came from. The question is whether the system — human or artificial — can combine them in truly new and useful ways.”

The argument left Marx astonished.

“Of course, that’s absolutely true,” he wrote, marveling at the way the AI ​​argued logically, injected humor, and anticipated its counterpoints. This discovery changed his entire view of machine intelligence, forcing him to ask: Is AI’s way of growing, learning and “thinking” really different from ours?”

Marx is famous in financial circles for his periodic “memos” to Oaktree clients. Written since 1990Which analyzes market cycles, risks and investor behaviour; It has been called some of the most influential writings in modern finance and is now on the list of most influential books in the world of modern finance Museum of American Finance Permanent Collection. Warren Buffett said That when he saw a memo from Howard Marks, that was the first thing he read, which helped boost Marks’ reputation among professional investors. In 2024, the Museum of American Finance awarded the Marx A Lifetime Achievement Award For his influence on financial thinking, underscoring how his memoirs and philosophy helped shape modern investing. So his opinion is just one opinion about the impact of AI, but it is absolutely an opinion.

Reasons why and why not

Now, Marks views AI not just as an assistant, but as an autonomous system — what he calls “Level 3” AI capable of completely replacing labor — and Marks says he sees huge implications for Wall Street. Many of the qualities required to be an exceptional investor are found in artificial intelligence, which can absorb endless data, recognize historical patterns, and operate completely free of human greed, fear, or fads. He also noted that technology is advancing at speeds beyond anything in history, with some models writing their own code and testing their own software independently.

However, despite the terrifyingly rapid development of artificial intelligence and its ability to mimic the intellectual synthesis of Buffett and Munger, Marks added that he does not believe human investors are completely obsolete. He argues that the human advantage remains in valuing truly new developments where historical patterns do not exist. Furthermore, AI lacks a crucial element of investing: “skin in the game.” Unlike humans, machines do not intuitively sense risks or feel the painful fear of losing capital.

Marx may be right that artificial intelligence will transform finance. But there is reason to pause at the feelings of awe he described. The beauty and persuasiveness of Claude’s response to Marx alone may give rise to doubt because… One of Claude’s core product features is customization. Large language models are very good at inferring context clues — in this case, a user’s name, professional background, and potential objections — and designing output accordingly. The 10,000-word article sounded like a letter from a brilliant colleague because it was Geometrically To feel this way.

Claude’s central argument—that Marx learned from Graham and Buffett just as Claude learned from training data—seems profound, but human learning and matching statistical patterns across a corpus of texts are not the same thing. Marx didn’t just do that He reads Graham. He applied the margin of safety in real markets, lost money, felt fear, revised his thinking under real uncertainty, and built convictions that would cost him something if he was wrong. This feedback loop—the score, the review, the hard-earned judgment—is exactly what Claude has never experienced before and cannot emulate.

Ultimately, Marx’s encounter with Claude convinces him that artificial intelligence is far more powerful than a simple fad, and its true potential is likely underestimated today. While he cautions against going “all-in” in AI stocks because of the risk of ruin, the legendary investor’s final advice is clear: No one should go “all-in” and risk missing out on one of the greatest technological leaps in human history. Although Claude will never have skin in the game.