Buildout, breakthroughs…bubble? An Artificial Intelligence progress report

Despite some speed bumps, artificial intelligence is already radically transforming how we live and work. Here’s what to watch for next.

It’s been nearly three years since artificial intelligence (AI) appeared on the scene. In that time, its promise has grown every quarter across seemingly every sector of the economy. Yet, despite Big Tech’s capital mobilization — over $300 billion(1) in planned spending in 2025 alone — those companies have yet to see a return on their investments. “We haven’t even scratched the surface about how much money is needed,” says Haim Israel, head of Global Thematic Investing for BofA Global Research.

In the video above, Israel talks with Chris Hyzy, Chief Investment Officer, Merrill and Bank of America Private Bank, about setbacks and risks that could slow the trajectory of the AI buildout, as well as the long-term potential for AI to transform everything about how we live and work. They delve into the race between the U.S. and China for AI dominance and identify potential long-term investment opportunities — from commodities such as copper, nickel and silicon to sectors including energy and transportation.

(1)CNBC, “Tech megacaps plan to spend more than $300 billion in 2025,” Feb. 8, 2025.

00:00 – Introduction: AI’s Rapid Rise & 2025 Headwinds
Chris Hyzy introduces the topic and outlines skepticism around AI, including concerns about Return on Investment (ROI) and market bubbles.
00:57 – Generative AI: Skepticism vs. Reality
Haim Israel compares current AI doubts to early internet skepticism and emphasizes the broader potential of AI.
01:34 – Infrastructure Demands: Data Centers & Materials
Discussion on the massive buildout needed for AI—from copper and fiber to energy and water.
02:35 – Rethinking ROI: Long-Term Impact of AI
Haim challenges traditional ROI metrics and highlights transformative use cases like drug discovery and materials science.
03:30 – Energy Revolution to Power AI
Exploration of energy sources like nuclear, renewables, and hydrogen to support AI infrastructure.
04:30 – Agentic AI: The Next Leap
Introduction to agentic AI—autonomous models that perform tasks and collaborate with other agents.
05:00 – Jobs of the Future: Displacement & Creation
Discussion on job market shifts, the need for creativity and ethics, and the prediction of 170M new jobs by 2030.
05:30 – Risks of the AI Revolution
Covers job displacement, resource strain, and digital security threats like deepfakes and privacy concerns.
06:45 – The Race for Global AI Dominance
Geopolitical implications of AI, with the U.S. and China competing for control over materials, talent, and infrastructure.
08:17 – AI vs. Industrial Revolution: A Bigger Shift
Haim compares AI’s exponential growth to Moore’s Law and argues it surpasses the Industrial Revolution in impact.

For more insights into investment trends from Merrill and the Chief Investment Office, visit Long Term Investment Themes & Stock Market Trends. https://www.ml.com/financial-research...

BofA Global Research is research produced by BofA Securities, Inc. (“BofAS”) and/or one or more of its affiliates. BofAS is a registered broker-dealer, Member SIPC and wholly owned subsidiary of Bank of America Corporation.

The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

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