Ultra-wealthy family investment firms are exhibiting a significant ‘Fear of Missing Out’ (FOMO) regarding artificial intelligence, driving substantial capital into the sector even as many anticipate a market correction. A recent survey conducted by RBC Wealth Management and Campden Wealth among 155 North American family offices reveals a paradoxical sentiment: while 85% identify AI as their primary investment theme, a striking 75% of respondents expect an AI bubble to burst within the next five years.

This mixed outlook, described by RBC’s Bill Ringham as cautious optimism, stems from both the immense potential of AI technology and the apprehension of being sidelined during a major investment boom. Ringham, director of private wealth strategies, noted that even patient capital can succumb to the pressure of missing out. The survey highlights AI as an asset class or investment theme likely to reward investors over the next 12 months, the next two to five years, or both, with 85% of respondents ranking it highly. This places AI ahead of U.S. equities (76%) and direct investments (72%) in overall short-to-medium term appeal.

However, a closer look at long-term strategies reveals a shift. While AI dominates as the top investment theme for 2026 (59%), family offices show greater confidence in U.S. equities over a two-to-five-year horizon, with 69% favoring them compared to 64% for AI. Direct investments follow closely at 62%. Real estate, while less popular in the short term (26% for 12 months), sees its appeal nearly double for the two-to-five-year outlook (51%). Ringham suggests these findings indicate that AI enthusiasm is primarily influencing short-term investment focus rather than long-term strategic planning, noting that “Fear of missing out is a short-term view.” He also emphasized the need for investors to approach the burgeoning AI startup space with “eyes wide open” given the multitude of new companies.

Beyond AI, family offices are also concerned about broader economic risks. The survey identified “excessive government borrowing” as the top market risk likely to materialize over the next five years (76%), closely followed by an “AI investment bubble burst” (75%) and “AI advancements impact employment” (66%). While the survey didn’t detail specific AI allocation changes, Ringham indicated that AI is deeply embedded across many asset classes, with 31% of family offices planning more direct investments in private equity and over a fifth in real estate and venture capital, suggesting AI’s pervasive influence on investment decisions.

Key Takeaways

• 85% of family offices view AI as their top investment theme, despite 75% anticipating an AI bubble burst within five years.
• Short-term investment decisions are heavily influenced by 'Fear of Missing Out' (FOMO) in AI, while U.S. equities are preferred for long-term returns.
• Beyond AI bubble concerns, family offices identify excessive government borrowing and AI's impact on employment as significant market risks.

Editor’s Analysis & Impact

The survey findings underscore a fascinating paradox in the investment landscape: a strong conviction in AI’s potential coupled with a clear apprehension of its speculative nature. This ‘FOMO’ driven investment, particularly in the short term, could lead to increased market volatility and potentially overvalued assets in the AI sector. While the long-term preference for U.S. equities suggests a more grounded strategic approach, the immediate influx of capital into AI startups indicates a willingness to take on higher risk for rapid gains. This dynamic could fuel continued innovation but also sets the stage for a significant market correction if expectations are not met. For the broader tech industry, this means sustained funding for AI development, but also a heightened need for due diligence and a clear-eyed assessment of sustainable growth versus hype.

Frequently Asked Questions

Q: What is 'FOMO' in the context of AI investments for family offices?
A: FOMO, or 'Fear of Missing Out,' refers to the anxiety felt by family offices that they might miss out on significant returns or opportunities by not investing in the rapidly growing artificial intelligence sector, even if they harbor concerns about its long-term stability or potential for a bubble.

Q: How do family offices' short-term and long-term investment preferences differ regarding AI?
A: In the short term (next 12 months), AI is the top investment priority for family offices, driven by FOMO. However, for the longer term (two to five years), U.S. equities are preferred over AI, indicating a more cautious and traditional approach to sustained growth.

Q: What other significant market risks concern family offices besides an AI investment bubble?
A: Beyond the potential AI investment bubble, family offices are most concerned about excessive government borrowing and the impact of AI advancements on employment, both of which are seen as major risks likely to materialize within the next five years.