Artificial Intelligence: Opportunities and challenges on the horizon 

The rise of AI presents transformative opportunities and challenges that investors need to consider.

Artificial intelligence (AI) continues to be a central topic in the global tech landscape. Major companies such as Amazon, Alphabet, Meta, and Microsoft have announced investments of up to US$500 billion over the next three years, a move reminiscent of the internet boom of the 90’s. 

While short-term expectations tend to be optimistic, analysts agree that the true potential of AI will unfold over the long term. With applications ranging from semiconductors and cloud services to language models and end-user tools, AI’s impact could be described as “immeasurable.” 

However, this technological revolution is not without its challenges. Increasing demand for energy and materials like copper could create bottlenecks, while the risk of overcapacity and signs of false demand could impact return-on-investment projections. 

AI is expected to evolve in two phases: an initial phase driven by consumer adoption, and a longer phase focused on enterprise integration. This highlights the importance of distinguishing between current enthusiasm and sustainable long-term opportunities. 

Technological development tends to be overestimated in the short term, while its long-term potential is often underestimated. 

Source: Capital Group