Bill Ackman urges investors to “applaud not boo” big tech’s AI spending

Billionaire hedge fund manager Bill Ackman has urged investors to back the massive wave of artificial intelligence investment being led by the world’s biggest technology companies, arguing that markets are underestimating the long-term payoff of the AI race.

In his latest annual letter to shareholders of Pershing Square Holdings, Ackman said that when companies such as Amazon, Meta and Alphabet announce sharp increases in capital spending on AI infrastructure, investors should not be sceptical.

“When a business you own, managed by a management team you trust, announces a large increase in capital spending,” he wrote, “you should be applauding rather than booing.”

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Ackman’s comments, reported come amid growing debate over whether Big Tech’s multibillion-dollar AI outlays are sustainable, with some analysts warning of an expensive arms race in data centres and computing power. Ackman, however, suggested critics are missing the scale of the opportunity, viewing today’s spending as foundational investment that could generate significant returns over time.

Ackman pushed back against the growing criticism that Big Tech’s multibillion-dollar AI outlays amount to an expensive arms race, insisting that the market’s reaction has been misplaced.

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“We believe the market’s negative response to these large capex announcements is misguided,” he wrote.

He argued that the technology giants have the balance sheets to fund these investments and that the spending should ultimately increase long-term value.

“The Three have the financial wherewithal to comfortably make these investments,” Ackman said, referring to Alphabet, Amazon and Meta.

Ackman added that what matters is not the headline size of the spending, but whether it generates returns over time.

“As long as a company’s increased capex spending is on projects that are expected to deliver returns comfortably in excess of the company’s cost of capital… the company’s growth and intrinsic value should increase,” he wrote.

Pershing Square has already positioned itself accordingly. The fund has taken significant exposure to AI-linked technology stocks, including a major stake in Meta, as investors increasingly weigh short-term volatility against the longer-term potential of AI to reshape productivity, cloud computing and consumer services across the global economy.

Ackman has become one of the most prominent Jewish voices to speak out on antisemitism since the October 7 Hamas attacks, particularly in relation to the rise in antisemitism across US universities.

In recent months he has repeatedly criticised Harvard University – his alma mater – over what he argues has been an inadequate response to rising hostility toward Jewish students on campus. Ackman was among the leading figures calling for stronger institutional action following controversial student statements and protests after October 7.

His high-profile interventions have sparked both support and criticism, placing him at the centre of a wider debate over free speech, protest and the safety of Jewish students in higher education.

Ackman’s remarks in the letter underline his growing focus on technology’s next wave. Whether his AI bets deliver the returns he expects, Ackman remains one of the most closely watched voices straddling finance, technology and public life.