Howard Marks says AI could shrink asset management, but human judgement will still matter

Oaktree Capital Management co-chairman Howard Marks says artificial intelligence is likely to push many investors out of the asset management business, much like index funds disrupted traditional stock-picking models. In a note published on Thursday, Marks said AI is exceptionally strong at processing data and identifying patterns, which could reduce the advantage many conventional managers once had.

However, he argued that the investors who survive this transition will be those with strengths in areas where AI is still weak. According to him, such areas include judging the quality of company leadership, evaluating the real importance of a new product, and making calls on complex qualitative factors that are difficult to reduce to data points.

Marks also said experienced investors are better positioned to navigate market situations that do not fit historical templates. He noted that while AI can be powerful when past patterns are clear, real-world investing still presents unique moments that require context, interpretation, and human judgement.

The veteran investor added that his Thursday note was prepared with support from Anthropic’s Claude AI model, underscoring his view that AI can be a valuable tool, but not a total replacement for top-level investment thinking.