A.I. and Deglobalization Redefine the Investment Landscape in 2025

The global economy in 2025 is caught in a tug-of-war between two powerful forces: the revolutionary potential of artificial intelligence (AI) and the geopolitical fragmentation of supply chains. These dynamics, highlighted in the Financial Times Press Digest for April 22, 2025, are reshaping investment priorities, market valuations, and corporate strategies. Investors must navigate a landscape where secular tech trends clash with tariff-driven deglobalization, creating both opportunities and risks.

The AI Infrastructure Boom

The AI revolution is no longer a distant future—it’s here. U.S. President Trump’s $100 billion AI infrastructure investment, backed by tech giants like OpenAI and SoftBank, underscores the scale of capital pouring into this sector. The Stargate joint venture, for example, aims to build advanced semiconductor facilities to support AI’s hunger for specialized chips, such as application-specific integrated circuits (ASICs).

This infrastructure boom is already driving growth for semiconductor firms. Take NVIDIA (), which has surged as its GPU technology powers AI training. Competitors like AMD and Intel are also reaping rewards, though Intel’s recent divestiture of its Altera chip unit to focus on core AI priorities signals strategic realignment.

The AI ripple effect extends beyond hardware. Cloud providers—Amazon Web Services, Microsoft Azure, and Google Cloud—have seen revenue balloon from $29 billion in 2018 to nearly $250 billion in 2024 (). This growth is structural, with only 10–20% of global workloads fully migrated to the cloud.

Digitization and the New Consumer Economy

E-commerce continues its march. U.S. online sales hit $1.2 trillion in 2024, but this represents just 22% of total retail—a fraction of China’s 35% penetration. Emerging markets like Latin America, where adoption hovers in the low teens, offer vast upside. Meanwhile, the shift to digital payments is still in its infancy: only $23 trillion of global spending is card-based, leaving $21 trillion in cash or informal transactions ().

Firms like Visa and Mastercard () are poised to benefit as cash-heavy regions like Asia and Latin America modernize. However, geopolitical fragmentation complicates this picture. U.S.-China trade wars have redirected supply chains, with Brazil now overtaking the U.S. as China’s top food supplier.

Healthcare’s Golden Age

Healthcare is undergoing its own revolution. The FDA approved 60 novel drugs in 2024, including breakthroughs for fatty liver disease and obesity. GLP-1 drugs alone generated $50 billion annually, with potential to grow as oral formulations replace weekly injections. Companies with robust pipelines in rare diseases and personalized medicine—like Novo Nordisk or Biogen—are primed to outperform.

Deglobalization: Winners and Losers

Tariffs and trade wars are reshaping supply chains. U.S. capital expenditures hit $8.4 trillion in 2024, driven by reshoring mandates for industries like semiconductors and industrial gases. Firms like Air Products and Honeywell, which supply equipment for new U.S. manufacturing plants, are beneficiaries.

However, the costs are steep. U.S. risky debt funds faced historic outflows as credit defaults rose, and European travelers canceled U.S. vacations amid policy uncertainty. The dollar’s “safe-haven” status is fraying (), signaling broader market distrust in U.S. economic stability.

The Risks: Geopolitics and Overhang

1. Trade Wars: U.S.-China tariffs remain unresolved, with Beijing retaliating against $25 billion in U.S. exports. The EU threatens tariffs on U.S. services if trade talks fail.
2. Corporate Caution: Private equity deals have stalled as firms reassess valuations. Canadian pensions are shifting to partnerships, not pioneering investments.
3. Consumer Fragility: Hispanic households, which account for 10% of U.S. retail sales, are cutting spending due to immigration fears. Credit defaults are rising, a red flag for broader economic health.

Conclusion: Navigating the New Normal

Investors must balance AI’s secular growth with deglobalization’s near-term risks. Winners will be those positioned in AI infrastructure (semiconductors, cloud), digitization (payment processors), and healthcare innovation (GLP-1 drugs, rare disease therapies). Meanwhile, sectors exposed to trade wars—luxury goods, automotive, and industrials—face headwinds.

The numbers tell the story:
- AI infrastructure capex is projected to hit $9 trillion in 2025, fueling growth for firms like NVIDIA and Intel.
- Cloud providers’ $250 billion revenue in 2024 is just half the addressable market.
- GLP-1 drugs, at $50 billion annually, could double as oral formulations gain traction.

Yet the path is fraught. Geopolitical fragmentation and rising credit defaults demand caution. Investors should prioritize companies with domestic supply chains, strong balance sheets, and exposure to unstoppable trends—not just today’s headlines.

In 2025, the investment mantra is clear: bet on the future, but hedge against the fractures.