Progress report: Is AI a market bubble?

Despite some speed bumps, artificial intelligence is already radically transforming how we live and work. Here’s what to watch for next.

IT’S BEEN NEARLY THREE YEARS since artificial intelligence (AI) appeared on the scene. In that time, its promise has grown every quarter across seemingly every sector of the economy. Yet, despite Big Tech’s capital mobilization — over $300 billion1 in planned spending in 2025 alone — those companies have yet to see a return on their investments. “We haven’t even scratched the surface about how much money is needed,” says Haim Israel, head of Global Thematic Investing for BofA Global Research.

In the video above, Israel talks with Chris Hyzy, Chief Investment Officer, Merrill and Bank of America Private Bank, about setbacks and risks that could slow the trajectory of the AI buildout, as well as the long-term potential for AI to transform everything about how we live and work. They delve into the race between the U.S. and China for AI dominance and identify potential long-term investment opportunities — from commodities such as copper, nickel and silicon to sectors including energy and transportation. And they answer the question top of mind for many investors: How should we think about AI as this tech revolution accelerates? Says Israel, “We are seeing rates that we’ve never seen in the past. This is now spreading to every industry in warp speed.”

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1 CNBC, “Tech megacaps plan to spend more than $300 billion in 2025,” Feb. 8, 2025.

Important disclosures

The opinions expressed are as of 9/2/2025 and are subject to change.

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The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).

BofA Global Research is research produced by BofA Securities, Inc. (“BofAS”) and/or one or more of its affiliates. BofAS is a registered broker-dealer, Member SIPC and wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).

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