Why are family offices so wary of AI?
Many family offices are standing on the sidelines as AI stocks have helped push markets skyward - particularly in the US. Why are they so hesitant to get involved? (Reuters/Dado Ruvic)
Family offices are not suffering from FOMO – at least as far as artificial intelligence is concerned, says Acorn Capital Advisers.
Such caution is notable at a time when we are, for all intents and purposes, amidst an AI revolution – or, some might say, bubble.
Stanford University’s latest AI index report says 88 per cent of organisations are adopting AI. The estimated annual value of generative AI tools to US consumers reached $172bn by early 2026, up from $112bn of the previous year.
JPMorgan has said about 65 per cent of family offices plan to prioritise the sector but in practice many remain on the sidelines.
More than half of those surveyed by JPM have no exposure to growth equity or venture capital, while roughly 80 per cent have no allocations to infrastructure – the physical foundation of AI’s development.
This caution reflects both structure and scepticism. Sally Tennant, founder of Acorn Capital Advisers, argues that a long-term investment horizon reduces the pressure to deploy capital quickly. Family offices typically prioritise wealth preservation and growth that compounds over time instead of exposure to short-term volatility. Many are therefore prepared to wait for valuations to settle before committing funds.
Even then, allocations are likely to be modest – often no more than 5 per cent – and made through infrastructure or public equities rather than direct investments in AI companies.
Some investors are unconvinced that AI deserves special treatment. Alex Felman, chief executive of Felman Family Office, is sceptical that AI differs significantly from previous technology cycles.
“I think AI is just the latest hype cycle where everyone is showing that they're an AI company,” he says. “Realistically most companies are just AI-enabled and not AI by personal definition. But we've seen this with big data. We've seen this with blockchain every couple of years. You see this happen with the newest kind of tech.”
Felman’s investment decisions remain focused on his existing priorities, namely healthcare and biotechnology. He says he would only invest in AI where it supports these themes.
In other words his priorities have not shifted but avoiding exposure to AI altogether may prove difficult due to the pervasive nature of the technology.
Bertrand Coste who manages the wealth of the Schlumberger family, of which he is a member, is investing in VC holdings which rely heavily on AI (Magali Delporte)
That stance may leave opportunities elsewhere in the AI ecosystem underexplored, particularly energy consumption. Large language models demand considerable computational resources. Training these models involves thousands of graphics processing units running continuously for months, leading to high electricity consumption.
Mahmut Kandemir, professor of computer science and engineering at the Institute of Energy and the Environment at Penn State University, anticipates that by 2030-35 data centres could account for 20 per cent of global electricity use, placing growing strain on power grids.
Bertrand Coste is a partner of Clerville Investment Management, which manages the wealth of the Schlumberger family of which he is a member.
He is already confronting this issue. According to Coste all of his venture capital holdings rely heavily on AI but struggle to secure sufficient power from public grids. He has pumped more money into a smaller VC investment to help address the problem. But whether it will work or not remains to be seen.
Like many of his peers Coste does not invest directly in data centres or AI. Instead he prefers to gain exposure through long-only and long-short portfolios, or indirectly through venture funds.
Whether this caution reflects a generational divide is unclear. Anna Chalov of Delfin Private Office, a wealth manager which works with family offices, describes AI as “generation agnostic” and argues that “you have to embrace it”. Acorn, by contrast, suggests younger generations may be more AI-literate and therefore more comfortable with the risks.
Either way, such differences are unlikely to transform family offices from interested observers to enthusiastic participants any time soon.