The capex boom should push yields higher over the next few years, but AI-driven R&D could raise the long-run productivity growth rate itself. Anthropic’s wet lab and OpenAI’s Navier–Stokes solution already demonstrated that potential. If AI ends up being more like the 1600s Scientific or 8,000 BC Agricultural Revolution than the Internet or smartphone revolutions, productivity growth could settle at a permanently higher rate even after the capex boom and AI diffusion are over. We may simply never see sub-4% long-end yields again.
The capex boom should push yields higher over the next few years, but AI-driven R&D could raise the long-run productivity growth rate itself. Anthropic’s wet lab and OpenAI’s Navier–Stokes solution already demonstrated that potential. If AI ends up being more like the 1600s Scientific or 8,000 BC Agricultural Revolution than the Internet or smartphone revolutions, productivity growth could settle at a permanently higher rate even after the capex boom and AI diffusion are over. We may simply never see sub-4% long-end yields again.
Strongly agree. Great comment.