Is This Peak Exuberance?

No One Knows — Including Your AI Model. So think about it differently.

A 23-year-old founder just raised $1 billion for an artificial intelligence company called Instinct, valuing the business at $10 billion. Instinct is building a personal AI agent that can plan trips, buy groceries, book tickets, manage subscriptions and increasingly act on your behalf.

The vision is easy enough to understand. Instead of opening Booking.com, Delta’s reservations app, Resy, Amazon, your calendar and half a dozen other apps, you tell Instinct what you want and it does the work. This is the consumer promise of agentic AI: another layer of convenience, coordinating all the tools that already made our lives more convenient.

But think about what investors are actually underwriting to assign this start up a valuation that exceeds that of American Airlines. Instinct was founded about a year ago, has 14 employees, and is still figuring out exactly how it will make money. Its founder, Noah Shinn, is 23 years old. He may be a brilliant technologist, but there is no meaningful operating history through which to judge his ability to manage exponential growth, lead a large organization, allocate billions of dollars, navigate competition or swim with the sharks of Silicon Valley.

That is not an insult. He may be the next Bill Gates or Jensen Huang. But building a remarkable product and building an enterprise worthy of an extraordinary valuation are not the same thing.

For Instinct to justify expectations anywhere near this scale, consumers must meaningfully change how they interact with the internet. Instinct must avoid being marginalized by fierce and flush competition. Apple’s next version of Siri, Google, Amazon, Meta, OpenAI or a competitor that does not even exist yet could change the economics quickly. A durable business model has to emerge. Consumers have to trust an AI agent with increasingly sensitive parts of their lives. And a very young organization led by a first-time founder has to become a very large and sophisticated one.

Whatever happens, it is a remarkable stack of assumptions to capitalize at $10 billion. Call it peak exuberance.

Instinct is not the only evidence of the phenomenon. Anthropic is reportedly contemplating a public-market valuation around $2 trillion while also facing staggering capital requirements. When Meta debuted its agentic AI product Muse, Meta’s market value increased by roughly $450 billion in the weeks that followed--making Instinct’s $10 billion valuation look modest.

Will consumer AI agents become huge standalone businesses, or useful features bundled into products we already use? Is Instinct more Pets.com or early Amazon?

That question is hard enough, but then there is the infrastructure surrounding all of it: data centers, semiconductors, power plants, natural gas, nuclear, transmission lines, cooling systems and debt financing. Are we building far too much? Or nowhere near enough?

Will OpenAI and Anthropic maintain extraordinary economics, or will increasingly capable lower-cost and open-weight models compress pricing and margins? Will Nvidia retain its enormous competitive advantage?

Add China and the threat to Taiwan. Iran and energy markets. Government debt. Interest rates. Political polarization. Historically concentrated U.S. equity markets.

Has there ever been a harder time to know what to do? Probably. Every generation of investors confronts its own collection of apparently unanswerable questions. The technologies change. The wars change. The companies change. The anxieties change. What does not change is our desire to know what happens next.

What is different today is the sheer amount of information available to us. Markets, earnings calls, institutional research, podcasts, social media, prediction markets and expert commentary are available constantly. Now add artificial intelligence, which can absorb enormous amounts of information and produce a thoughtful explanation of almost any subject in seconds.

Spend a few hours with these tools and you can become reasonably conversant in semiconductor supply chains, Chinese military strategy, data-center economics or venture-capital valuations. The temptation is to begin to believe you have unique insight and predictive powers.

Beware of that false confidence. Information abundance can masquerade as expertise. Expertise can masquerade as foresight. Neither is the same thing.

A few hours on ChatGPT does not make us experts, and even if it did, the future would remain unpredictable in these complex systems. I can read deeply about Taiwan. That does not make me a geopolitical strategist able to assess the risk and fallout of a move by China. More importantly, the actual experts disagree with one another.

The hallmark of true expertise is appropriate humility.

Study the possibilities, understand the risks, do the math and admit what you cannot know. Then work out the strategy and tactics with the highest probability of winning. That is my job as an asset allocator on behalf of my clients.

But let’s define what it means to win. The "game" I play does not require me to answer definitively any of the unanswerable questions. For my clients, and probably for you, the objective is not “pick the next Anthropic,” “predict what high diesel prices mean for inflation next quarter,” or “predict the price of gold in a year.”

The objective is usually something more like this: “I need my investment portfolio to sustain $250,000 per year of lifestyle beginning ten years from now, and sustain it, adjusted for inflation, for another 40 years.”

Now consider all those unanswerable questions again in the context of that much clearer and more consequential objective.

Is this peak exuberance? I have an opinion, and my allocations are influenced by extreme conditions wherever they show up. But I do not need to know whether Instinct itself succeeds. I can have exposure to venture capital without requiring Instinct to become the next great technology platform. I can own technology without requiring Nvidia to dominate forever. I can own equities without making a family’s financial future dependent on U.S. megacap technology continuing to lead.

That is the point of portfolio construction: reduce the number of predictions your financial plan requires to be correct.

For me, that means diversified exposure across asset classes, public and private investments, different economic drivers, different investment styles and sources of return that do not all depend on the same outcome. It also means having enough liquidity to avoid becoming a forced seller and the patience to let the structure work.

That patience comes with a tradeoff. When U.S. technology stocks soar, diversification looks unnecessary. That is part of the bargain. The objective is not to own only what turns out to work best. The objective is to have enough things work well enough that the financial plan works.

Why is this important now? Because more and more portfolios are exposed to a few concentrated bets. Whether it is your 401(k) in an index fund, a large position in company stock, or years of letting the winners run, you may be looking around wondering whether this is peak exuberance and whether it is time to do something. Then the next rally or compelling AI narrative arrives and keeps you from acting.

Reframe the question.

Do not ask whether Instinct is Pets.com or Amazon. Do not ask whether AI is a bubble, whether gold is headed higher, or whether inflation will accelerate next quarter. Ask a more consequential question: Is my portfolio built to deliver the money I need, when I need it, across a wide range of outcomes? If you are approaching retirement, that is the game you are trying to win.

Source notes

• Reuters / MarketWatch reporting on Instinct’s $1 billion financing, $10 billion valuation, 14-person staff and consumer-agent positioning (Sept. 2026).

• Reuters reporting on Anthropic’s IPO prospectus and potential valuation around $2 trillion (Sept.–Oct. 2026).

• Reuters Breakingviews reporting that Meta gained roughly $450 billion in market value following Muse’s launch (Oct. 2, 2026).

• StockAnalysis: American Airlines market capitalization approximately $8.7 billion as of Oct. 1, 2026.