Developments in AI have played a major role in buoying markets — and in particular, the Magnificent 7 — since the tail-end of 2022, when the public launch of ChatGPT marked a watershed moment for generative AI (GenAI).
But while the past two years have mostly been about experimentation and personal adoption of GenAI, 2025 will mark the start of true widespread adoption of AI in business processes, says digital wealth management firm StashAway in its 2025 macro outlook, released Dec 23.
Researchers are focused on making “AI agents” widely available. These are autonomous systems that can perform end-to-end tasks without human intervention. For example, Sam Altman from OpenAI has discussed achieving their definition of “Artificial General Intelligence” (AGI) — a form of artificial intelligence that can complete tasks as well as humans, or even better — as soon as next year.
Greater productivity
StashAway says companies that have integrated AI in their workflows are already experiencing a “significant increase” in output. A recent study by PwC found that sectors with the highest AI penetration are seeing 4.8 times greater labour productivity growth.
This is especially significant in the context of weak productivity growth over much of the past decade, with OECD countries posting an average increase of only 1.1% between 2011 and 2020, and declines in 2021 and 2022 due to the pandemic.
See also: ‘Great Monetary Expansion’, Trump 2.0 feature in StashAway’s 2025 outlook
According to StashAway, this boost in productivity not only reduces costs for businesses but also enables faster innovation cycles, creating a positive feedback loop that lifts aggregate productivity and fuels economic growth.
A study by Goldman Sachs estimates that widespread adoption of AI could lift productivity growth by 1.5 percentage points and drive a 7% increase in global GDP over a 10-year period.
Another study by market intelligence firm International Data Corporation (IDC) claims every US dollar spent on AI solutions and services is expected to generate US$4.60 into the global economy by 2030, adding almost US$20 trillion ($27.17 trillion) of cumulative economic benefit.
Wider gains, fatter profits
See also: Are we using AI correctly at work?
The productivity gains brought by AI can also translate directly into improved corporate margins for some industries, says StashAway.
Already, tools such as AI-powered coding assistants are transforming software development. Demand for IT-related skills saw a 26% decline overall in the past few years as tech giants like Meta and X were able to significantly cut headcount while increasing output.
This is just the beginning; a recent survey conducted by PwC shows that while only one-third of CEOs say their companies have adopted GenAI, more than double that amount see the technology significantly impacting their firms over the next three years.
AI promises to support productivity in the years ahead. This bodes well for economic growth, though this will depend on the pace and scale of adoption, says StashAway.
While it is “conventional wisdom” that technology is deflationary, StashAway notes that AI’s impact on prices may be “more nuanced” compared with the Internet era’s direct deflationary impact on goods.
“For one, the capital outlays related to building out AI-related infrastructure are likely to be inflationary in the near term. But while AI will displace some jobs, history has shown that new types of jobs are created when new technologies emerge,” adds StashAway.
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As people get more free time, services that cater to those needs will see an increase in demand, says StashAway. Yoga instructors, for example, are in high demand, adds StashAway, citing a PwC study. “These factors could offset the deflationary forces in sectors impacted by AI.”
StashAway’s outlook, fronted by its chief investment officer Stephanie Leung, notes “two key trends” that will materialise in 2025 and drive asset class returns for years to come: ongoing advancements in AI, and an increased focus on fiscal policy around the globe.
For more on StashAway’s outlook on AI in the year ahead, read “‘Great Monetary Expansion’, Trump 2.0 feature in StashAway’s 2025 outlook”.
Charts: StashAway
