Ruchir Sharma, the former Morgan Stanley chief strategist and chair of Rockefeller International, says US markets are effectively betting on artificial intelligence to sustain economic growth.
In a new CNBC interview, Sharma says AI spending is responsible for a large portion of current US growth and has fueled the rally in both stocks and bonds this year.
He notes that AI expectations are now deeply woven into the narrative of American economic resilience.
“If you just look at the AI spend, that alone accounts for 4%of GDP growth this year. But there are second and third-order effects. The other is coming from the wealth effect from the stock market.”
He points out that AI-linked equities have dominated market performance, allowing wealthy American investors to reap gains that power US consumption.
“In the stock market, as you know, 80% of the gains in the US stock market this year are on the back of AI plays. Now, the US stock market, as you know, the top 10% own nearly 90% of the US stocks.
And if you look at consumer spending in the US, it’s all being driven by the top 10%. In fact, the top 10% have never had such a large share of the overall consumer spending in the US as they have this year.”
Sharma says the concentration of wealth and consumption shows how AI’s impact on the economy extends far beyond tech firms and into household spending.
“So this is very much an AI story being played out at multiple levels.”
Beyond equities, Sharma believes investors are assuming that increased adoption of AI will deliver tangible productivity gains.
“The only reason you can sustain such high real interest rates as we have now compared to what we had in the past couple of decades is if you end up getting an increase in productivity. So yes, the US market is making an implicit bet that because of increased adoption from here that productivity growth will go up by half to 1% at least from here.”
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