Howard Marks Says He Underestimated AI’s Potential, Turns More Optimistic After Trying Claude

Oaktree Capital co-founder Howard Marks has long focused on high-yield bonds, distressed debt and market cycles. In his December 9, 2025, memo, “Is It a Bubble?”, he was still warning that the AI boom was accompanied by high valuations and excessive investment. His shift in stance now shows that AI has moved beyond a technology-stock theme to encompass corporate cash flow, capital spending and credit risk.

In “AI Hurtles Ahead,” published on February 26, 2026, Marks said the advances made in just 11 weeks had exceeded his expectations. Anthropic’s Claude produced a personalized 10,000-word course comprising nine modules for him, leaving him in awe and leading him to conclude that AI’s potential was more likely to be underestimated. He nevertheless cautioned that genuine technology does not mean assets are cheap. New debt issuance by the five largest cloud providers is projected to exceed $300 billion in 2026, underscoring how AI infrastructure is reshaping financing structures.