Future Fund chief not convinced AI boom constitutes sector ‘bubble’
Participating in the same panel discussion, ABS Australian Statistician Dr. David Gruen said evidence of productivity gains leveraging AI is still elusive.
Per capita GDP growth through June was 0.2 percent, which Gruen described as “slow.”
“Obviously there is some technological change, but it’s not clear to me whether that technological change is significant on an aggregate scale,” Gruen said.
“If that were the case, you’d have to see faster productivity growth, and we’re not seeing it nearly anywhere.”
Data centers are critical to expanding the AI-driven economy as they provide the computing capacity required for the complex data processing behind the technology.
In February, Future Fund increased its stake in data center developer and operator CDC, “the largest data center operator and developer in Australia and New Zealand”, to 34.6 per cent.
Future Fund executive chairman Greg Combet was quoted as saying in a speech for the former Labor minister in June that the fund believes “AI will come, perhaps faster than many people expected.”
Loading
“Data centres, energy infrastructure and renewable energy generation present the Future Fund with a sustainable growth story in the advancement and adoption of artificial intelligence,” Combet told the Australian Economic Development Committee.
Goldman Sachs has suggested that mainstream adoption of generative AI could result in a 15 percent productivity increase. accepted”.
AI stocks have experienced a phenomenal rise; chipmaking giant Nvidia last month became the first publicly traded company to hit a $5 trillion market cap; This amount is roughly twice the size of Australia’s entire share market.
US hedge fund manager Michael Burry, who successfully bet against subprime mortgages ahead of the 2008 global financial crisis, reportedly placed a US$1.1 billion bet against the share prices of two AI powerhouses – Nvidia and Palantir technologies – last week.
Given its large presence in global markets, the Future Fund is a key investor in the U.S. stock market, which has rallied this year thanks to strong growth in technology stocks that have benefited from the excitement surrounding artificial intelligence.
Combet said in June that the Trump administration was “adding layers of volatility and uncertainty” to financial markets, warning that the United States was becoming a riskier investment destination and could likely attract a smaller share of global capital flows.
The Business Briefing newsletter delivers big stories, exclusive news and expert insights. Sign up to receive it every weekday morning.
