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Investment strategist Samer Choucair believes the rapid adoption of artificial intelligence is pushing the global economy and capital markets into a pivotal phase, combining exceptional opportunities to increase productivity and generate growth with structural risks related to employment, wealth distribution, and social and political stability.

Choucair said the AI-driven transformation should not be measured solely by the scale of investment in digital infrastructure or the growth rates of technology companies. Instead, it should be evaluated through a broader lens that considers how effectively economies can absorb changes affecting employment, income, consumption, and public finances.

“Institutional investors are now required to look beyond capital-spending figures and short-term returns and assess an economy’s ability to absorb the social shocks accompanying this transformation. Capital allocation that ignores the risks of political or regulatory instability could become a source of losses over the medium term,” Choucair said.

A Global Investment Wave Reshaping the Economy

Choucair explained that major economies are experiencing an accelerating wave of capital expenditure on AI-related infrastructure, including data centers, computing capacity, power networks, and supporting technologies.

This spending reflects growing confidence in AI’s ability to increase productivity and reshape large segments of the global economy.

However, Choucair believes the speed and breadth of AI adoption make the current transformation different from several previous technological shifts. Automation is no longer limited to manual labor or routine tasks; it is increasingly extending into a growing range of office-based and professional occupations.

“Technological transformation creates significant economic value, but it also redistributes gains among sectors, workers, and geographic regions. Understanding the future of markets therefore requires examining the relationship between productivity, employment, income, and consumption, rather than simply measuring revenue and earnings growth in sectors benefiting directly from AI,” he said.

Labor-Market Changes and Their Impact on Capital Markets

Choucair noted that AI’s impact on labor markets will vary significantly across industries and professional groups.

While new technologies can enhance the productivity of workers whose skills complement AI, they could also restructure a substantial number of jobs built around repetitive tasks.

These changes could affect capital markets through their impact on consumer spending and demand for goods and services. They could also increase pressure on governments to expand workforce training, reskilling, and social-protection programs.

At the same time, Choucair sees new investment opportunities emerging in vocational training, digital education, workforce reskilling, and software solutions that help organizations integrate AI while preserving the effectiveness of human capital.

“Portfolio management in the next phase will require a combination of exposure to digital-infrastructure sectors and companies capable of generating genuine productivity gains, alongside a parallel hedge through more defensive assets or assets linked to government demand for social restructuring. Excessive concentration in major technology companies without considering the secondary effects on consumption and stability could expose portfolios to unexpected volatility,” Choucair said.

Saudi Arabia and the Gulf Face a Strategic Opportunity

Choucair believes the global AI transformation is coinciding with extensive efforts across the Gulf to diversify economies and develop new high-value sectors.

Saudi Arabia, he said, is particularly well positioned to benefit from global growth in digital infrastructure, computing capacity, and the energy required to support it.

Investment in data centers, digital infrastructure, and domestic AI capabilities could become an important driver of economic diversification, provided these investments are accompanied by policies designed to increase productivity, develop human capital, and create sustainable economic opportunities.

“Investment in the Saudi economy in the coming years must take into account AI’s dual nature. The opportunities in digital infrastructure and the energy supporting data centers are clear, but the real success will come from directing capital toward projects that raise overall productivity and create sustainable employment opportunities in line with long-term diversification objectives,” Choucair said.

He added that developing complementary sectors such as tourism, healthcare, logistics, education, and financial technology could help Gulf economies distribute the gains from technological transformation more broadly while reducing dependence on any single sector or source of growth.

Governance and Risk Management Move to the Forefront

One of the key challenges facing institutional investors, Choucair said, is the potential for regulatory and political pressure to increase as concerns over job displacement and unequal distribution of wealth grow.

These risks could affect corporate valuations and investment strategies, particularly if governments introduce stricter frameworks governing AI or pursue policies designed to redistribute a larger share of the economic gains generated by the technology.

Choucair believes this environment is creating investment opportunities in energy and data infrastructure, cybersecurity, enterprise productivity tools, education and workforce reskilling, as well as companies providing solutions that help businesses and governments manage the transition toward an AI-driven economy.

“The successful investor at this stage is one who combines an analysis of technological trends with a deep understanding of public-policy dynamics and labor markets. Capital allocation must balance the pursuit of growth in the digital economy with protection against structural risks arising from distributional gaps,” he said.

A Long-Term Investment Perspective

Choucair concluded that artificial intelligence is likely to become one of the most important drivers of economic growth and productivity in the coming years. However, the sustainability of this investment cycle will depend on the ability of governments, companies, and investors to manage the transition in a way that spreads economic gains while limiting social disruption.

Institutional investors and sovereign wealth funds, he noted, have a particularly important role to play in directing capital toward projects that combine technological innovation with economic and social sustainability.

This approach, he argues, can generate long-term returns while reducing the risks associated with structural economic transformation.

“The current phase represents a genuine test of capital markets’ ability to absorb a profound technological transformation without sacrificing long-term stability. Success will not belong only to those who generate the highest short-term returns, but also to those who build portfolios capable of adapting to the reshaping of the global economy on more balanced and sustainable foundations,” Choucair said.