Ark Invest CEO Cathie Wood said the booming artificial intelligence sector could face a valuation “reality check” as market expectations collide with shifting interest rate dynamics.

Speaking to CNBC’s Dan Murphy at the Future Investment Initiative in Riyadh, Wood said markets may soon transition from expectations of lower borrowing costs to concerns about rising rates. That shift could trigger volatility, especially in high-growth technology names.

“There will be a shudder in markets,” Wood said, adding that many investors incorrectly assume innovation and interest rates move inversely. “The way algorithms work these days, we think there will be a reality check.”

Tech valuations have soared as companies race to expand AI capabilities. Global institutions such as the IMF and Bank of Eng

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