Recognizing a risk is not the same as managing it.
Opal Capital | August 2026
In short: AI spending, valuations, and adoption timelines are accelerating across the advisory industry, and many firms privately admit the pace cannot continue forever, yet keep expanding exposure anyway. That excuse is not new. In 2007, Citigroup’s CEO gave the same reasoning about the leveraged lending boom just before credit markets seized, in a remark that became known as “we’re still dancing.” Opal Capital’s approach is to separate genuine AI opportunity from herd driven risk through diversification, vendor discipline, and human oversight, rather than following the crowd by default.
Why AI Adoption Is Accelerating Among Advisors
Across the advisory industry, AI is everywhere at once: in client conversations, in marketing budgets, in the tools firms are racing to deploy, and in the portfolios increasingly tilted toward AI linked companies. The enthusiasm is not unfounded. Artificial intelligence is producing real productivity gains in research, service, and operations, and firms that adopt it well stand to benefit.
But talk to advisors privately and a familiar caveat comes up. Many will acknowledge that the current pace of AI spending, AI linked valuations, and AI adoption cannot continue indefinitely. Then comes the follow up: clients expect it, competitors are already there, we cannot afford to fall behind. Those may be true statements. On their own, they are not a decision rule. They are a reason to keep dancing.
The 2007 Warning: Chuck Prince’s “We’re Still Dancing” Quote
In July 2007, days before credit markets began to seize, Citigroup’s then CEO Chuck Prince gave an interview that would define his legacy in ways he likely never intended. Discussing the private equity and leveraged lending boom, he said:
“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
The line is often remembered as a confession about subprime mortgages. It was not. Prince made the remark specifically about the leveraged lending market, and he later told investigators it reflected competitive pressure from private equity clients and rival banks rather than a judgment about mortgage backed securities. That distinction matters for the historical record. It matters less for the lesson underneath it.
Prince was not oblivious to risk. He named it directly, in the same breath as the quote that would haunt him. What he described was something more familiar: a perceived inability to step back unilaterally because competitors were still active, and standing still meant losing clients, deal flow, and bankers to firms willing to keep going.
“Everyone points to the same excuse Prince used. We know it can’t go on forever, but we can’t afford to be the ones who stop. That excuse didn’t hold up well in 2007, and it won’t hold up any better applied to AI. Recognizing a risk and managing it are two different disciplines.”
Austin Graff, Founder, CEO & CIO, Opal Capital
AI Concentration Risk vs. the 2007 Leveraged Lending Boom
The comparison is not that AI is a bubble, or that 2026 is 2007. It is that the underlying behavior is the same: a group of smart, informed people can see a risk clearly and still feel compelled to participate anyway, because everyone else is moving and standing still feels like the greater danger.
For advisors, that pressure tends to show up as two distinct risks that deserve two distinct conversations.
- Portfolio concentration. How much of a client’s expected return is tied to a narrow group of AI linked companies, sectors, or funds, and what happens to that portfolio if adoption, earnings, or regulatory assumptions disappoint.
- Operational dependence. How much of a firm’s workflow now runs through a small number of AI vendors, models, or tools, often without the oversight, data governance, or contingency planning that would normally accompany a decision of that size.
Both risks can be reasonable to accept. Neither should be accepted by default, and neither should be driven primarily by what competitors are doing.
How Opal Capital Approaches AI Concentration Risk
Opal Capital’s goal is not to avoid innovation. It is to participate with a plan.
That starts with a few questions we ask before adding exposure, whether in a client portfolio or in our own operations:
- What do we actually own or use, and why?
- How much of the expected benefit is already reflected in price, budget, or expectations?
- What is the concentration exposure, by company, sector, vendor, or workflow?
- What would a disappointment in adoption, earnings, regulation, or cost do to the portfolio or the practice?
- Where does human judgment and oversight remain in place?
With diversification, we try to keep no single theme from dominating a portfolio. We also test new technology before it touches important workflows, keep human judgment in the loop, and build strategies that do not depend on favorable conditions lasting indefinitely.
Chuck Prince was not wrong to see the risk in front of him. He was unable to act on what he saw. Nearly two decades later, his line endures less as a punchline and more as a useful test: knowing something can’t go on forever is only useful if it changes what you do next.
Frequently Asked Questions
Why do many advisors keep increasing AI exposure even when they expect it to slow down?
Advisors and firms often cite competitive pressure, client expectations, and fear of falling behind peers as reasons to keep expanding AI exposure, even when they privately acknowledge the current pace of AI spending and adoption cannot continue indefinitely. That is a decision driven by peer behavior rather than an independent risk assessment.
What did Chuck Prince mean by “we’re still dancing”?
In July 2007, then Citigroup CEO Chuck Prince said that as long as liquidity in the leveraged lending market remained abundant, the firm would keep participating, even though he acknowledged conditions would become difficult once that liquidity changed. The remark became a symbol of competitive pressure overriding independent risk judgment ahead of the 2008 credit crisis.
Was Chuck Prince’s dancing comment about subprime mortgages?
No. Prince made the remark specifically about the leveraged lending and private equity market. He later testified that the comment reflected competitive pressure from private equity clients and rival banks, not a judgment about mortgage backed securities.
What is Opal Capital’s approach to AI adoption risk for financial advisors?
Opal Capital separates AI exposure into portfolio concentration risk and operational or vendor dependence risk, and evaluates each against fundamentals, valuation, diversification, and contingency planning rather than adopting exposure because peers or clients expect it. The goal is thoughtful participation in AI, not avoidance and not default acceptance.
Sources
- Reuters, “Ex-Citi CEO Defends ‘Dancing’ Quote to US Panel” reuters.com
- The New York Times, DealBook, “Prince Finally Explains His Dancing Comment” dealbook.nytimes.com
- Reuters, “Ex-Citi CEO Dogged by Dancing Quote” reuters.com
- C-SPAN, “Chuck Prince: ‘It’s All About Dancing’” c-span.org
- Reuters, “Big Tech to Invest About $650 Billion in AI in 2026, Bridgewater Says” reuters.com