Oaktree Memos

AI Hurtles Ahead

by Howard Marks, Co-Chairman, Oaktree Capital Management

READ THE ORIGINAL

Published in full and free by Oaktree Capital Management. This page indexes its arguments; it is not a copy.

THE ARGUMENT

Marks treats AI as a real technology shift whose pace is more likely underestimated than overestimated, and separates that judgment from the question of what its securities are worth. The recommendation is a moderate, selective position rather than all-in or all-out.

What it actually claims

  1. Adoption reached a scale in two years that most technologies need a decade for.

    • roughly 400 million individual users
    • 75-80% of companies, as of February 2026
  2. He tracks capability by year to argue the rate of change itself is the thing being mispriced.

    • unable to do basic arithmetic in 2022
    • passing the bar exam in 2023
    • writing working software in 2024
    • completing tasks autonomously by 2026
  3. He cites recursive self-improvement as having arrived in a shipped product.

    • GPT-5.3-Codex described by OpenAI as instrumental in creating itself
  4. He points to physical-world deployment as evidence this is not confined to demos.

    • Waymo handles roughly one-fifth of San Francisco taxi trips
  5. He frames the economic transfer in terms of labor value migrating to compute.

    • $150-250 billion in annual labor value migrating to AI compute, in software alone

Figures are the author's own, as cited in the memo.

TOPICS

ALSO IN OAKTREE MEMOS