Legendary investor says the AI boom masks a deeper crisis: Falling sperm counts, shrinking populations, and vanishing resources

Jeremy Grantham has been called many things. Permabear. Doom merchant. Cassandra with a British accent. For decades, the co-founder of the Boston-based asset manager GMO has warned that financial markets were inflated to dangerous, unsustainable heights—and he has made enemies for it. But ask him how he feels about all of it, and he sounds almost cheerful.

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“Data is data,” he told Fortune in a recent interview. “I quite like thinking these things through.”

The equanimity makes more sense once you know his Myers-Briggs “animal”: he’s a dolphin.

At a dinner years ago, during his time managing a $1 billion mandate alongside JPMorgan, Morgan Stanley, and Goldman Sachs, Grantham was administered an elaborate personality test featuring animal avatars. When the results came in, six of the seven people at the leadership table turned out to be owls—dominant, decisive, strategic. The seventh was Grantham. “I was this innocent, idealistic dolphin on a table of sharks masquerading as owls,” he said. When the dolphins were asked to stand in the room of roughly 60 finance executives, there were only two: Grantham and the woman running the test. (It was strange, he added, when one bank in particular had a table full of “foxes.”)

So that settles it, according to the co-author of the recently released memoir, The Making of a Permabear, written alongside financial historian Edward Chancellor. He’s not a bear — he’s a dolphin, driven by a powerful streak of idealism, the kind that lets you pursue an uncomfortable truth, call it better than anyone else, and feel quietly satisfied even when no one wants to listen. He calls the whole framework “Myers-Briggs crap,” but admits the data shows it works—which, he notes, is more than you can say for most of the academic models that are supposed to.

Grantham has earned the right to trust his own instincts over consensus. Over 40 years, he called out the Japanese stock and real estate bubbles before they collapsed at the turn of the 1990s. He called the dotcom bubble before it burst a decade later. And in September 2007, he wrote in these very pages that the U.S. housing sector was in “genuine bubble territory” — months before that market’s implosion triggered the Great Financial Crisis. As late as August 2007, the Federal Reserve was skeptical of such bubble talk, while Grantham was dismissed as a pessimist, a dismissal that soon proved mistaken.

People don’t react well to the bear—or the dolphin—in the room, Grantham said. “It makes people really angry,” he explained, “but not uniformly.” The angriest reactions are “when things are getting really crazy” in markets, he said, recalling a quarterly letter he wrote in 2021, around the theme of “waiting for the last dance.” In January 2022, he talked about in a Bloomberg podcast appearance and found the response “ballistic and viral, I think is the expression.” It struck a nerve with the Bitcoin crowd, he explained, who are “crazy as coots,” and three particular comments “went to great lengths to point out that I had big ears, for God’s sake. I had not heard that since I was about six or seven years old.”

“I irritated the stock market players, irritated the newbies who were investing their Biden’s money, as it were,” Grantham said, referring to the stimulus package widely seen as fueling a surge in speculative investments, including the “meme stock” craze that still occasionally resurfaces. “To the moon, they were having a real time with those meme stocks. Everything worked out well.”

The bubble within a bubble

Grantham’s current thesis is that U.S. equities are trapped inside what he calls a “bubble within a bubble.”

The original super-bubble, as he sees it, was already inflating dangerously through 2021 before the S&P 500 started to crack. People don’t remember it now, but the S&P 500 had actually fallen about 25% from January through October 2022, but then ChatGPT arrived. “The day after Chat came out, the Mag 7 lifted the market on its broad shoulders and staggered forward,” he said, injecting a fresh speculative frenzy on top of an already overvalued system. The AI boom didn’t fix the underlying problem, according to Grantham— t deferred it while making it larger.

His January 2026 paper, co-authored with Chancellor, was titled Valuing AI: Extreme Bubble — New Golden Era — Or Both? The answer, in Grantham’s view, is mostly the first. He has said there is a “slim to none” chance the AI bubble does not eventually burst, and that it could drag the broader market down to levels not seen since the worst bear markets in modern history. The market’s price-to-book ratio and cyclically adjusted earnings multiples are at extremes that were only surpassed in 1929, 1972, 1999-2000, and 2021, he noted — each followed by devastating corrections. It’s just what the data suggests, he told Fortune rather cheerily, noting that exuberance in the markets still isn’t as dramatic as the dotcom boom.

His diagnosis is that the ma