L&G Asset Management sees AI equity upside despite US$3 trillion debt concerns

British organization capitalist L&G Asset Management is not perturbed by the rising indebtedness issuance successful the artificial quality sector, adjacent arsenic it sees opportunities successful the equities of manufacture giants.

Credit related to the AI assemblage could turn betwixt US$500 cardinal and US$800 cardinal a twelvemonth and scope astir US$3 trillion by 2030, according to Ben Bennett, caput of concern strategy successful Asia astatine the plus absorption steadfast known for its progressive fixed income strategies.

"We are antiaircraft successful presumption of allocating to that peculiar sector," said Bennett, whose steadfast manages immoderate US$1.5 trillion of assets.

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Mega fundraising deals successful the AI assemblage are emerging rapidly amid an intensifying race, with Meta, Google and Oracle acceptable to rise much than US$70 cardinal betwixt them successful the adjacent fewer weeks.

Meta, Google and Oracle are acceptable to rise much than US$70 cardinal betwixt them successful the adjacent fewer weeks. Photo: EPA alt=Meta, Google and Oracle are acceptable to rise much than US$70 cardinal betwixt them successful the adjacent fewer weeks. Photo: EPA>

Bennett, who expected a important summation successful the AI indebtedness issuance pipeline, said helium was "a small spot acrophobic astir the supply".

In opposition to Michael Burry - the "Big Short" capitalist who made billions from the 2008 situation - the L&G strategist did not spot an AI bubble, citing the "very impressive" net of the Magnificent Seven tech giants.

On the caller slump successful the shares of US giants similar Nvidia, Bennett said it was earthy to spot corrections aft a rally, adding that much adjustments were likely.

Compared with AI debt, the shares of AI firms were much charismatic arsenic they had amended upside potential, according to Bennett.

On bonds, Bennett said "there volition beryllium tactical opportunities", but helium planned to hold until the timing was right.

Bennett besides forecast that the tech taxable would predominate Asian equity markets adjacent year. But helium preferred US stocks to Chinese stocks, citing their quality to construe gross and profitability into stock terms appreciation.

However, Hong Kong and mainland Chinese banal benchmarks person performed amended than their US counterparts. The Hang Seng Index has risen 33 per cent truthful acold this twelvemonth and the CSI 300 Index 20 per cent, outperforming the S&P 500's 17 per cent gain, acknowledgment to the coagulated show of Chinese tech firms.