Dmitry Balyasny, CEO and Managing Partner at Balyasny Asset Management L.P., speaks during the Skybridge Capital SALT New York 2021 conference in New York City, U.S., September 13, 2021. REUTERS/Brendan McDermid

By Nell Mackenzie

ABU DHABI, Dec 9 (Reuters) - Hedge fund Balyasny Asset Management's managing partner said on Tuesday that the largest tail risk for the year ahead is if artificial intelligence surprises on the upside or the downside.

Dmitry Balyasny, managing partner and the firm's CIO, said if there was a fall-off in demand and AI companies --- especially so-called hyper-scalers -- changed their spending plans because they did not achieve the monetization they needed, this would be a surprise to the downside.

Also, an outside risk the hedge fund manager was watching for was if the AI industry took off faster than expected. This could cause job losses before employees were able to retrain for other opportunities, Balyasny said during a fireside chat at Abu Dhabi Finance Week.

"Either of those scenarios could create some instability, but I think the more likely outcome is that it continues to grow the way that it has," he said.

Balyasny Asset Management manages $31 billion.

Balyasny, discussing his newly office location in Abu Dhabi, said the city was at an earlier stage of development than New York or London but said the city was growing as a financial centre.

He pointed to how much money was moving into the region, how talent was attracted to the lifestyle in Abu Dhabi and the city's commitment to AI and technology.

The hedge fund returned 2.5% in November and is up 15.3% for the year so far, Reuters reported last week.

(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe)