On My Mind: Of bots and men—Investing in the age of AI

This year’s investment landscape is being reshaped by the rapid advance of AI, shifting global growth dynamics and evolving geopolitics, all of which are redefining how investors think about risk and opportunity. AI remains a powerful but uncertain driver, with markets moving from enthusiasm over infrastructure providers to a more cautious focus on potential losers and the slower-to-materialize productivity winners. At the same time, emerging markets stand out for relatively prudent policies and improving macro conditions, while Europe offers cyclical appeal that could become structural if long-delayed reforms finally materialize.

The US continues to surprise on the upside with resilient growth, broadening investment and stronger productivity, even as its large fiscal deficit and rising debt cast a longer-term shadow. Against this backdrop of persistent inflation pressures and a likely end to Fed easing, elevated US valuations, dollar headwinds and geopolitical shifts argue for measured diversification toward select EM sovereigns, corporates and currencies without abandoning the depth and resilience of US markets.