AI as an investment cycle: What needs to go right

At one end is a vision of unprecedented productivity, scientific discovery and economic growth. At the other is disruption: job displacement, misinformation, and systemic risk. The reality, as is often the case with transformative technologies, likely lies somewhere in between.

For investors, however, the question is not philosophical – it’s practical. Markets are being asked to underwrite one of the largest capital allocation cycles in modern history, with the expectation that future revenue will justify today’s spending. The key question, then, is simple: What needs to be true for the economics of AI to work?

In this article, Robeco’s sister company Boston Partners takes a closer look at what needs to go right for the economics behind this transformative technology to work.