Risk and Reward in an AI-Fuelled Cycle

L&G’s 2026 Global Outlook assesses how AI-driven capex, fiscal strain and geopolitical uncertainty are reshaping asset allocation across public and private markets 

• The US remains the swing factor for global growth, with AI investment supporting resilience but labour-market softness and tariff aftershocks posing downside risks.

• AI capex could reach trillions through 2030, increasingly debt-funded, raising questions around spreads, sovereign financing, and concentration risk in hyperscalers.

• Elevated public debt and rising term premia revive fiscal sustainability concerns, yet US Treasuries still function as a relative safe haven.

Is this the start of a durable productivity boom—or a cycle built on leverage and sentiment? The full outlook explores the cross-asset implications.