We Went to Wall Street’s Exclusive Wilderness Camp. Everyone Was Spooked by AI.

GRAND LAKE STREAM, MAINE—Barry Norton was a half-hour into his talk on scientific breakthroughs in artificial intelligence when he was asked the most important question on Wall Street.

The crowd of money managers, economists and other finance types had made their annual pilgrimage to this fishing mecca in Maine’s wilderness, trading suits for T-shirts and cargo pants. As they drained their wine glasses in the wood-paneled dining room, Norton had them transfixed: The longtime tech investor laid out how chip design would one day be so intricate and efficient that engineers would literally be moving molecules.

Then a hand went up: All these AI advances are costing U.S. companies trillions of dollars. Will there be a return on that investment?

“I can’t answer the question, and Wall Street can’t answer the question,” said Norton, standing in the corner of the room, replicas of fish and birds pinned to the walls behind him. “I don’t know that yet. I worry about that.”

You wouldn’t know it from glancing at major stock indexes or Micron’s share price, but behind closed doors, Wall Street’s anxiety about AI is reaching new heights.

Big tech companies that once had indestructible balance sheets are now cash flow negative. The spending not shown on balance sheets is even greater. Expectations for revenue growth are off the charts and companies like OpenAI are struggling to keep up. The world’s most valuable company, Nvidia, is nurturing an entirely new asset class to keep chip sales humming.

The paradox in the AI trade—investors are questioning the hype even as they pour money in—was everywhere at Camp Kotok, an invite-only weekend getaway for pros from across the finance world. On canoes, over coffee and around the poker table, attendees (or “campers,” as they are referred to here) debated whether the earnings from the big AI spending binge will materialize or the market is headed for pain.

No one really knows. But no players are ready to take their chips off the table.

“The level of spending has gotten so extraordinary that we have no choice but to jaw drop at it and wonder how all of this is going to turn out,” said Peter Boockvar, the chief investment officer at OnePoint BFG Wealth Partners and a longtime attendee of Camp Kotok. At the same time, he said, “there’s a party going on. People don’t want to leave early.”

One evening, a frank debate played out over a poker game. There was definitely overinvestment in data centers, one camper argued. But wasn’t that always the case with a major new technology? Look at the internet or railroads, another argued: Each was marked by a wave of euphoria, then the eventual sorting of the winners and losers.

And what to make of Leopold Aschenbrenner, whose AI-focused hedge fund Situational Awareness was nearly destroyed by a selloff in some AI stocks just days before the Kotok gathering? He’s a kid, some players shrugged. An inexperienced investor who had learned one of the market’s most basic and painful lessons—borrow too much, get burned.

Later, some campers privately fretted that the downfall of Aschenbrenner’s firm was something far more serious, said camp organizer and veteran money manager David Kotok. Maybe it was the kind of “cockroach” that JPMorgan Chase Chief Executive Jamie Dimon has warned about when talking about private credit—one problem that signaled there would be more.

The event itself is designed for these kinds of rambling discussions and unfettered hot takes. Kotok started bringing a group of market wonks up to this tiny town in Maine some 25 years ago. Since then, the gathering has welcomed financiers, policymakers and subject-matter experts of all kinds, many of them handpicked by Kotok himself. “The Walden woods for Wall Street,” one camper calls it. Or more simply: “nerd camp.”

This lakeside resort—which some campers compare to Jackson Hole or Davos—is where attendees say things they might not otherwise write in analyst notes or shout over CNBC airwaves. The event follows the Chatham House rule, meaning attendees can reveal the topics of discussion but not the identities or affiliations of the speakers (the quotes in this article came from on-the-record exchanges).

Most regular attendees have decades of experience in markets. They have vivid memories of prior asset bubbles, from the fiber optic investment boom of the dot-com era to the mortgage-backed securities binge that planted the seeds of the global financial crisis.

The chatter can prove prescient. Fifteen years ago, campers were sitting down for the annual lobster night when the news broke that Standard & Poor’s had downgraded Treasury debt, ranking U.S. government bonds below more than those of a dozen other countries.

That night, attendees whispered that this was only the beginning, and it was likely that the country’s finances would get much worse. Flash forward to this week, when gross U.S. debt surpassed $40 trillion for the first time.

This year, no one could say whether the huge tech bets underpinning the bull market would play out the way investors hope. The AI anxieties weren’t nearly so severe last summer, said Adam Phillips, head of investments at EP Wealth Advisors.

But much has changed since then: The bond market is struggling to absorb a quarter-trillion dollar wave of AI debt. The country’s economic growth rate is increasingly propped up by the effects of the investment boom.

That’s focused a lot more attention on the timing of returns on AI spending, Phillips said. “Unfortunately, we’re all in the same boat. The experts don’t know,” he said. “It’s kind of unsettling.”

That isn’t to say that this group of Wall Street old-timers is bearish on AI as a useful technology. Over plates of fried fish at lunchtime or sitting on the back deck after dark, campers swapped tips on how they’re integrating agentic tools into their own workflows.

One has the tool generate a daily briefing on the overnight markets. Another plugged in a strongly worded email and asked the agent if he would regret sending it (the answer was yes, and he held off).

Nobody is here to talk their book. But when pressed, campers let on that the market jitters are getting to them—a bit. Some have tweaked their portfolios, shifting from overweight positions in large-cap tech stocks to a more neutral stance. Others hinted that the time was right to diversify into other sectors of the S&P 500. But no one is really betting against the AI boom.

You can blame that in part on experience, Boockvar said—this group remembers a number of other Cassandras who got wiped out for calling the top too early. Most attendees were holding their doubts about AI in one hand and pressing “buy” with the other.

After all, the tech trade is in many respects the only game in town.

“Nobody wants to be left behind,” Norton said in an interview after his panel. “Every [technological] revolution we’ve gone through, everybody jumps in. And when the music stops, someone’s going to be holding the bag.”