By Andrea McKinney, MBA, CFP® – Senior Vice President & Wealth Management Advisor & Charles Welsh, CFP® – Vice President & Wealth Management Advisor
The term Artificial Intelligence (“AI”) was formally introduced by Professor John McCarthy at the Dartmouth Summer Research Project on Artificial Intelligence in 1956. McCarthy built many foundations including the Lisp language, computer time-sharing, and situation calculus. He inspired generations of researchers who built onto these foundations. Shortly after joining Stanford’s faculty, McCarthy founded the Stanford Artificial Intelligence Lab (“SAIL”) in 1963 which continues to be a catalyst for education, research and collaboration.
AI as a Driver of Economic Growth
Today’s AI systems have evolved so dramatically they are considered major drivers of innovation and economic growth. Predictions published by the Penn Wharton, University of Pennsylvania Newsletter, September 2025, anticipate AI will increase productivity and GDP by 1.5% by 2035, nearly 3% by 2055, and 3.7% by 2075. AI heavy tech companies have driven a large portion of stock market gains since late 2022, as reported by Morningstar. This reinforces the idea that AI enthusiasm has been a dominant market driver. The significant rise in valuations of many AI-exposed companies, ongoing large investments in AI buildout and the increasing circularity of the AI ecosystem are top of mind for the investing community.
Capital Inflows and Market Leaders
AI focused tech companies may be reaping the benefits of investor sentiment that AI investing could reshape long-term growth trends. Valuations of these companies seem to be on the rise with appreciation centered on firms where rising demand for AI capabilities has translated into higher revenue expectations. In March 2025, OpenAI’s landmark $40 billion funding round valued the company at $300 billion. This was the largest ever funding round and the capital will be used to power enormous computing needs, expand infrastructure and acquire talent to compete with other AI leaders.
The Circular AI Ecosystem
AI operates in an ecosystem which requires real estate, data centers, advanced chips and specialized hardware. Last year, major tech companies collectively invested significantly in AI-related capital expenditures as they expanded data center capacity, compute infrastructure, and supporting hardware. Model companies, infrastructure providers and hyperscalers are signing deals with each other that blur the lines between the traditional business model of customers, suppliers and capacity providers. For example, Nvidia is investing in OpenAI and then OpenAI pledges to spend on compute from Oracle and finally Oracle buys Nvidia chips. This circularity in the ecosystem reflects the alliances formed for strategic investments reinforcing each company’s growth narrative.
Infrastructure Expansion and Resource Constraints
AI capital expenditures are expected to continue in 2026. Recently, Meta announced it plans to build a data center in Richland Parish, Louisiana, on a 2,250 acre site. According to reporting based on U.S. energy data, the facility is expected to require more than twice the electricity used by the entire city of New Orleans. Concerns regarding the consumption of natural resources for these projects appear to be growing. According to reports from Data Center Watch and other industry trackers, organized community opposition to data center expansion is on the rise, with local activists and residents increasingly pushing back against new projects.
Geopolitical Strategy and Global Alliances
The United States is building new alliances to maintain leadership in the AI era, most notably through Pax Silica — the State Department’s flagship initiative on AI and supply chain security. The Pax Silica Declaration aims to strengthen supply chain resilience, reduce coercive dependencies and single points of failure, and promote trusted technology ecosystems across critical domains such as compute, semiconductors, advanced manufacturing, logistics, minerals, and energy. The initiative is designed as an economic security coalition for the AI age, treating compute and the minerals that feed it as strategic assets. Current signatories include Australia, Israel, Japan, the Republic of Korea, Qatar, Singapore, and the United Kingdom, with more expected to join.
A Global Transformation
Artificial Intelligence is rapidly transforming global markets, infrastructure and strategic priorities. Its growth is fueled by unprecedented investment, technological integration, and international collaboration. As nations and corporations compete for leadership, AI is shaping future innovation, economic security, and geopolitical alliances, signaling a profound shift in how technology drives progress worldwide.
