Long Term Outlook 2025 - Artificial Intelligence
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Article Type
Insights
Topic
Long-Term Outlook
Published
September 15, 2025
Read time
5 mins
Authors
Jordy Hermanns, CFA
Jacob Vijverberg, CFA
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At the end of September we will publish our Long -Term Outlook, offering a comprehensive view of the structural trends reshaping the investment landscape. This publication combines deep insights into macroeconomic developments with asset class fundamentals to derive long-term expected return estimates—key inputs for our strategic asset allocation. 


The article below is an excerpt from the upcoming Outlook, focusing on Artificial Intelligence. As one of the most transformative forces in today’s economy, AI is influencing both macroeconomic dynamics and the structure of the investment universe. Its impact is profound, and understanding its implications is essential for long-term investors. 


AI: The Great Economic Offset 

As trade tensions mount and globalization falters, a new force is reshaping the economic landscape. Artificial intelligence is now emerging as a driver of productivity—and a potential counterweight to the economic drag induced by protectionist policies. 

The expanding AI ecosystem is becoming a cornerstone of American corporate resilience. Earnings remain robust, buoyed by the sector’s innovation and investment. The so-called “Magnificent Seven” tech giants are leading the charge, pouring capital into data centers and energy infrastructure. Their combined capital expenditure now accounts for an impressive 1% of US GDP. 

Figure 1: Investments in IT & software and structures in the US 

Source: Aegon Asset Management, Bloomberg (As of June 2025) 


The shift in the investment boom in AI is now visible in macroeconomic data. For instance, investments in IT & software have sharply increased recently while those in residential and non-residential structures are stagnating. Investment in structures is typically interest rate sensitive, so these are held back by the currently high lending rates. This is one reason why the US economy has been relatively resilient to the rise in rates.  

Unlike previous waves of software-led innovation, AI demands a substantial build-out of physical infrastructure, like data centers, upgraded power grids, and new energy generation capacity. We therefore expect non-residential structure investment to pick up. This shift will also imply that the economic benefits will be felt earlier as we don’t have to wait for actual productivity improvements to be implemented.  

Longer term, the added benefit lies in productivity. AI’s predictive capabilities promise to revolutionize inventory management, logistics, and financial modelling. In research and development, AI tools are accelerating discovery, compressing timelines, and expanding horizons. Estimates of the economic impact vary wildly. Conservative forecasts suggest a cumulative GDP boost of 1–2%. More exuberant projections, hinging on the arrival of artificial general intelligence (AGI), envision a doubling of annual growth rates. Some even go as far as annual growth rates of up to 20% as AGI would independently be able to optimize processes and make discoveries. However, we view this as unlikely in the short run as much of the economy will still depend on physical constraints in available energy, materials and machinery.  

What is clear is that AI holds the potential to reshape the economic trajectory over the next decade. When compared with the drag from trade frictions: innovation may well swamp the costs of geopolitical fragmentation. 

Yet the benefits will not be evenly distributed. The US, with its deep capital markets and dominant tech sector, is best positioned to reap the rewards. China, despite restrictions on semiconductor exports, is making rapid strides in model efficiency and deployment. Europe, by contrast, remains a spectator—dependent on US technology and hoping access will remain open. 

In the race to harness AI, the stakes are high. The winners will not only enjoy faster growth, but also greater strategic autonomy. The rest may find themselves increasingly reliant on others.  

Figure 2: Labor productivity per hour 

Source: Long Term Productivity Database, Aegon Asset Management (as of 2022) 

 

Beyond its structural impact on productivity and strategic autonomy, Artificial Intelligence is increasingly shaping financial markets. Over the past few years, technology companies have seen significant growth in both market capitalization and influence. More recently, the AI boom has added fresh momentum, driving the share prices of several tech and AI-focused firms to new record highs.

Megacaps such as NVIDIA, Microsoft, and Amazon have dominated headlines, reflecting AI’s central role in equity market dynamics. However, the influence of AI extends well beyond these giants—its footprint is becoming visible across a broader range of sectors, including listed real estate. 

AI’s Impact on Listed Real Estate 

The real estate sector is undergoing a structural shift. AI’s demand for computing power has driven a surge in investment in data center infrastructure. In the US, annual investment in data centers has grown from under $5 billion in 2015 to over $40 billion today. 

Figure 3: Construction in the US (SAAR, $ billions). Value of Private Construction Put in Place (US) - Seasonally Adjusted Annual Rate.  

Source: Aegon Asset Management, US Census Bureau (As of July 2025). 

This transformation is reflected in the composition of listed REITs. The weight of data center REITs has increased from just 1% to over 8%, mirroring the earlier shift driven by the e-commerce boom, which boosted demand for industrial warehouses. 

Figure 4: Composition of Listed Real Estate market. Based on the FTSE EPRA Nareit Global REITs Index.

Source: Aegon Asset Management, Bloomberg, FTSE (As of Aug-2025). 

AI is a force that is reshaping economies, markets, and industries. As this structural shift unfolds, investors must stay attuned to its multifaceted impact. Understanding the impact of AI on a macro-economic as well as a market level is important. And understanding where AI creates value—and where it concentrates risk—will be key to navigating the investment landscape in the years ahead. 

Important Information

Authors

Jordy Hermanns, CFA
Portfolio Manager
Jordy Hermanns, CFA, is a portfolio manager in the multi-asset group and serves as an investment strategist in the asset allocation team. Jordy is responsible for strategic and tactical asset allocation decisions on the asset allocation team.  
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Jacob Vijverberg, CFA
Asset Allocation Lead
Jacob Vijverberg, CFA, is the asset allocation lead for the multi-asset team, responsible for both strategic and tactical asset allocation, and co-portfolio manager of the Aegon Global Diversified Income Fund. He also provides macro-economic analysis to internal and external stakeholders.  
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