David Booth — founder of Dimensional Fund Advisors and one of the people most associated with index-based investing — has made an argument that reads as contrarian and is not: artificial intelligence may change the world, and that is not a reason to change your portfolio.
The interesting part is that he is not dismissing AI. He has compared its potential scale to the shift from ice blocks to refrigerators — a change so complete that the previous thing stops existing.
The bit people skip
Most arguments about AI stocks are arguments about technology: how good it will get, how fast, who is ahead. Booth’s argument is not about technology at all. It is about prices.
A share price is not a measure of how good a company is. It is a measure of how good a company is relative to what buyers already believe. If everyone agrees a company will benefit enormously from AI, that belief is already in the price — because the people who hold that belief have already bought.
Which means being right about AI is not enough. To make money picking AI winners you have to be right about something the market has got wrong — that a company will do better than the consensus already assumes, or that a rival will do worse. “AI is going to be huge” is not that. It is the single most widely held opinion in the market, which is precisely why it cannot be an edge. This is the step that gets skipped in almost every conversation about buying the AI theme, and it is the whole of the disagreement.
What he suggests instead
Owning the broad public market through a diversified portfolio that already contains the AI companies, along with everything else.
The logic is that you do not need to know which companies win. If AI produces enormous value, some of that value accrues to public companies, and a broad holding captures it automatically — including from companies nobody has heard of yet, which will be added to indexes as they grow.
| Picking AI winners | Broad diversification | |
|---|---|---|
| Requires | A correct forecast the market lacks | No forecast |
| If AI booms | Large gain — if you chose right | You participate |
| If the winners are companies that do not exist yet | You miss them | They arrive in the index |
Why this argument keeps returning
Every genuinely transformative technology has produced the same pattern: the technology arrives, changes everything, and still makes most of the people who bet on it poorer. Railways, aviation, radio, the early internet — each transformed the world and each produced far more failed companies than successful ones.
The transformation being real and the investment being good are separate questions, and the first does not imply the second. That is Booth’s point, and it is old rather than new — which is part of why it is worth hearing during a period when the opposite view is very loud.
Who he is, since people are asking
| Dimensional Fund Advisors | Founder and chairman; the firm passed $1 trillion in global assets under management in 2026 |
| University of Kansas | Alumnus and longtime donor. David Booth Kansas Memorial Stadium carries his name |
| 2025 gift | $300 million to Kansas Athletics — reported as among the largest gifts in college athletics history |
| 2010 | Presented KU with James Naismith’s original 1891 rules of basketball, bought at auction |
There is a certain symmetry in a man who argues against trying to pick the single winner having bought the single most significant document in basketball and then given it away.
David Booth’s comments on artificial intelligence and investing, including the comparison of AI’s potential scale to the move from ice blocks to refrigerators and the argument that broad diversification is preferable to selecting expected beneficiaries, were reported by Fortune on 1 September 2026 and in related interviews carried by Bloomberg and Morningstar in August 2026. Dimensional Fund Advisors, of which he is founder and chairman, is reported to have crossed $1 trillion in global assets under management in 2026. His $300 million donation to Kansas Athletics was announced in August 2025 and reported as among the largest gifts in the history of college athletics; the football venue is named David Booth Kansas Memorial Stadium, and in 2010 he presented the university with James Naismith’s original 1891 copy of the rules of basketball. This article describes an investor’s stated views and general principles of market pricing. It is not investment advice, does not recommend any security or strategy, and readers should consult a qualified financial adviser about their own circumstances.
Frequently Asked Questions (FAQ)
Who is David Booth?
The founder and chairman of Dimensional Fund Advisors, and one of the figures associated with the development of index-based investing. Dimensional crossed $1 trillion in global assets under management in 2026.
What is he saying about AI?
That artificial intelligence may be a genuinely enormous advance — he has compared its scale to the move from ice blocks to refrigerators — while arguing that trying to identify which companies will benefit is not a reliable way to invest.
What does he suggest instead?
Owning the broad public market through a diversified portfolio that already contains AI companies alongside everything else, so that an investor participates in whatever the future turns out to be rather than betting on a prediction of it.
Why would picking AI winners not work?
Because share prices already reflect what investors collectively expect. To profit from picking, you have to be right about something the market has priced incorrectly — not merely right that AI is important.
Is he connected to the University of Kansas?
Yes. He is a KU alumnus and a longstanding donor. The football venue is named David Booth Kansas Memorial Stadium, and in 2025 he made a $300 million donation to Kansas Athletics, reported as among the largest gifts in the history of college athletics.
What is the story about the basketball rules?
In 2010 he presented the university with James Naismith’s original 1891 copy of the thirteen rules of basketball, which he had acquired at auction.
