Proof Pending: Can AI Deliver Lasting Growth?

AI spending is still a powerful engine for growth, but the bigger question is whether productivity gains can sustain it once the capex boom slows. The largest tech firms are pouring unprecedented sums into data centers, chips, and software, which is supporting GDP now and helping keep long-term growth expectations elevated. Yet rising costs, physical limits, and funding needs could pressure returns and make the pace of investment less durable over time.

For investors, that creates a split outlook. In the near term, AI should continue to support equity issuance and credit activity across the technology supply chain. Over a longer horizon, however, markets may need clearer evidence that AI is lifting economy-wide productivity rather than just boosting capital spending.

The main risk is that if those productivity gains disappoint, today’s higher growth and rate assumptions could be repriced lower. That makes AI both an opportunity and a valuation test. Investors may want to stay constructive on the theme while watching whether earnings power begins to broaden beyond infrastructure buildout alone.