Investors See AI Slowdown as a Temporary Step

Summary

Jennifer Lee, senior economist at BMO Capital Markets, discusses the market implications of calls to slow AI development. She argues any slowdown is likely temporary and that AI infrastructure, investment, and demand remain intact on a multi-decade horizon, while labor-force shortages should keep driving automation and robotics. She also expects the Fed to hike in September and sees at least a couple of rate hikes before year-end, though she says a recession call is premature.

• Calls to slow AI development may create near-term uncertainty but not a lasting reversal.
• Jennifer Lee sees AI as a 20-year infrastructure and investment theme.
• State data-center moratoriums in New York and Texas are viewed as temporary headwinds.
• Slowing global labor-force growth supports automation, AI, and robotics demand.
• Lee expects the Fed to hike in September and at least a couple of times before year-end.
• She says it is too early to call a recession and expects some consumer-spending slowdown.