Hedge fund managing partner Dmitry Balyasny taps AI as largest tail risk for 2026

ABU ‌DHABI, Dec 9 (Reuters) - Hedge fund Balyasny ‍Asset Management's ‌managing partner said on Tuesday that the ⁠largest tail risk ‌for the year ahead is if artificial intelligence surprises on the upside or the downside.

Dmitry ⁠Balyasny, managing partner and the firm's chief investment officer, ​said if there was a ‌fall-off in demand and ⁠AI companies --- especially so-called hyper-scalers -- changed their spending plans because they did not ​achieve the monetization they needed, this would be a surprise to the downside.

Also, an outside risk the hedge fund manager ​was ‍watching for was ​if the AI industry took off faster than expected, causing job losses before employees were able to retrain for other opportunities, he said during a fireside chat ⁠at Abu Dhabi Finance Week.

"Either of those scenarios could create some ​instability, but I think the more likely outcome is that it continues to grow the way that it ‌has," he said.

Balyasny Asset Management manages $31 billion.

(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe)