South Dakota’s investment chief Matt Clark says the South Dakota Retirement System is running behind benchmarks by cautious design. A big part of that caution is Clark’s conviction that market gains in artificial intelligence are driven by hype, just like past new-tech bubbles:
Clark, who has been with the Investment Council since the 1980s, said South Dakota is “underweight” in the artificial intelligence boom.
Clark compared the current AI-driven stock market to the “dot-com bubble” of the late 1990s. The investment council started pulling back from the market in 1996 and waited until the bubble burst. The stock market has been in a similar position recently with some of the most expensive prices since the 20th century ended, Clark told lawmakers.
Clark told South Dakota Searchlight that investors historically get “overexcited” about technological innovations, including railroads, telephones, automobiles and airplanes.
“In each of those instances, they were overdone in terms of stock market investor enthusiasm,” Clark told Searchlight. “You end up overdoing it, at least in the short term.”
Many companies struggled or went bankrupt after those bubbles popped, such as fiber optic companies after the dot-com bubble. He expects the same for artificial intelligence.
By minimizing risk ahead of a downturn, that means South Dakota’s investors can “sidestep most of the damage” and buy cheap stocks while other investors are recovering from their losses.
“Maybe we’ll set a new record and we’ll have to suffer another two to three years, but we still believe strongly that staying the course with a long-term oriented, disciplined approach makes sense,” Clark told lawmakers. “It has to matter when markets are extremely expensive” [Makenzie Huber, “State’s Investment Manager Urges Patience with Underperformance, Waiting for Better Opportunities,” South Dakota Searchlight, 2026.03.20].
We can only hope that bubble pops before the tech oligarchy puts 97 million Americans out of work in the next decade.
But we can also wonder: will Clark use artificial intelligence to guide investment decisions and reduce the staff he needs below him at the South Dakota Investment Council to manage the state’s portfolio?