Perspectives Special Edition: in-depth analyses of key trends and topics shaping financial markets and investors’ decisions, providing well-founded insights into complex developments and forward-looking themes.
Key insights: Artifical Intelligence
Artificial intelligence has moved from technological curiosity to a central driver of economic and market dynamics. The widespread adoption of generative AI tools since 2022 marks a turning point, enabling new applications across industries while also raising important questions for investors.
This publication takes a structured view of AI’s implications. It begins with an examination of the technology itself – its capabilities, limitations and likely next steps. It then evaluates whether AI can deliver the productivity gains often anticipated in economic forecasts. Finally, it explores how these developments are already reshaping credit and equity markets.
Across all four perspectives, one message stands out: AI’s long-term potential is substantial, but near-term outcomes remain uncertain and uneven.
Focus Themes
Focus #1: AI – the underlying technology
Large Language Models have made remarkable progress since the launch of ChatGPT in late 2022, yet there are signs that simply building ever-larger models may not be enough, and benchmarks reveal that current systems still fall far short of human-level reasoning. While world models may be the next big unlock, the biggest near-term opportunity lies in integrating AI into workflows, particularly through coding agents and AI assistants, but adoption will take time, requiring companies to rethink processes and establish guardrails against errors.
Focus #2: Will AI lead to a productivity boom?
AI optimists argue that we are facing huge productivity gains and a golden decade, while pessimists warn of mass unemployment. Economic history calls for modesty: we will not run out of work, and new technologies will always take time to translate into productivity statistics.
Focus #3: The impact of AI on the credit markets
The credit markets are feeling the full impact of the AI revolution through strong demand for credit to fund capital expenditures and fear that AI will break business models. Both increased the credit volatility and caused dispersion of the credit spreads ending three years of high and undifferentiated positive performance.
Focus #4: AI and equity markets – bubble or is it different this time?
AI is the fastest ever adopted technology in history. Since the release of ChatGPT in 2022, AI stocks have performed extremely well. However, doubts about investments, valuations and adverse side effects have arisen in recent months. We examine the current situation and the outlook for AI stocks and analyse 4 topics: performance & valuation, signs of a bubble, viable investment alternatives to (US) AI stocks, and key aspects for the future.
