AI Opportunities and Challenges: Are Individual Investors Able to Bridge the Gap?

The rise of AI as a resource for individual investors is transforming how diversification is approached, granting retail participants a level of market insight once exclusive to large institutions. While technology companies such as C3.ai, Inc. (AI) face challenges related to leadership and financial results, innovative AI-powered investment platforms are demonstrating strong performance. For example, Sagehood.ai’s Agentic AI Index achieved a 38% return from the start of the year through October 2025, surpassing hedge fund averages. This success is attributed to a collaborative team of nine people and eight AI agents who uncover underappreciated opportunities within the S&P 500, as reported by the

. This method stands in stark contrast to the difficulties encountered by C3.ai, where, according to , a lawsuit claims poor management linked to the CEO’s health and overly optimistic forecasts.

Retail investors have long struggled with the pitfalls of excessive reliance on broad indices or static investment mixes. In contrast, Sagehood’s approach continuously adapts, drawing on up-to-date financial data, economic indicators, and sentiment analysis to pursue a contrarian path that steers clear of overcrowded tech names. “We’re not simply automating investing—we’re reinventing how assets are managed,” stated Sagehood CEO Amir Seyedi, emphasizing the company’s ambition to turn its AI-managed index into a publicly listed fund, as previously reported. This strategy reflects a wider trend among institutions:

, for instance, increased its crypto assets by $22 billion in the third quarter of 2025, with outgrowing , according to . The company’s ETF segment also attracted $17 billion in digital asset investments, reflecting rising trust in AI-driven infrastructure and asset tokenization, as noted by TradingView.

However, the promise of AI comes with its own set of challenges. C3.ai’s latest earnings guidance—projecting a 450% decline in EPS year-over-year—highlights the difficulties of scaling AI-based enterprise solutions. Experts point to shrinking profit margins in its subscription business and mounting competition from companies like Palantir and UiPath, as detailed in an

. Ongoing legal proceedings against C3.ai further emphasize governance issues, with plaintiffs accusing the company of making misleading claims about the CEO’s health and operational strength, according to a . These developments illustrate the disconnect between AI’s potential and its real-world implementation, especially for businesses heavily dependent on a single executive or untested market strategies, as the Asiae article also notes.

Major financial institutions are also utilizing AI to transform how capital is allocated. BlackRock’s $1 billion investment in LendingClub and its launch of crypto ETFs on the London Stock Exchange are part of a broader commitment to using AI to broaden access to alternative investments. Additionally, the firm’s $3 billion investment in Meta’s AI data center in Louisiana—part of a $27 billion private capital raise—demonstrates support for the infrastructure underpinning AI. These actions highlight AI’s role not just in trading, but in reshaping how capital flows across industries.

As AI continues to revolutionize asset management, its effectiveness depends on how well it is executed. Sagehood’s transparent and interpretable AI framework and BlackRock’s targeted investments offer promising examples, while C3.ai’s difficulties serve as a warning. For individual investors, the main lesson is that AI’s strength lies in its adaptability, but its true worth depends on strong oversight, diverse applications, and a clear advantage in navigating market shifts.