For wealthy family offices, the choice is crystal clear: invest in a slow-growing green energy project, or in artificial intelligence (AI) for triple the profit in a quarter. The latter, it seems, is the way to go.

Family offices, with trillions in assets, are increasingly bypassing traditional venture capital funds for direct investments in private companies, especially those leading in AI. This shift is driven by the potential for high returns and the desire to avoid the hands-off approach of fund managers.

While the trend towards riskier investments shows no signs of slowing, history suggests cycles of boom and bust. In 2021, direct investments reached 13% of family office portfolios, but by late 2023, they had plummeted by 53%. Now, family offices are back, spending big on fewer deals, often through the secondary market, to de-risk and ensure a steady flow of returns.

Despite concerns about inflated valuations, family offices remain bullish on AI. A J.P. Morgan report found that 65% plan to prioritize AI investments, seeing it as a powerful growth opportunity in an uncertain market. Whether this will be a sustainable trend or just another bubble remains to be seen.