Hello from Tokyo, where the Global Management Dialogue -- an annual forum sponsored by Nikkei and Swiss business school IMD -- was held this week. At the event, where international business leaders took the stage, the obvious spotlight was on artificial intelligence. Jonathan Gray, president of investment firm Blackstone, acknowledged concerns about AI-related capital misallocation but said the technology marks a "sea change" that will fundamentally transform businesses. Top executives from global companies such as Johnson & Johnson also made clear their commitment to advancing the use of AI.
Before the forum in Tokyo, another gathering in Hong Kong also featured cautionary remarks from executives at global financial firms regarding the AI boom. Are we in the midst of an AI bubble? If so, what could cause it to burst? These will be crucial questions in the coming months -- or perhaps even in the coming weeks.
There is no doubt that AI is an innovation equal to -- or maybe even greater than -- the internet. However, just as with the internet bubble of the early 2000s, expectations tend to overshoot when disruptive innovation occurs. What deserves close attention right now is the trajectory of U.S. tech giants' data center investment plans. In quarterly earnings announced last week, these companies showed no signs of easing their aggressive investment. If we begin to see even the slightest signs of caution in these investment plans, it might spark yet another bubble collapse.
Led by chip giant Taiwan Semiconductor Manufacturing Co., Asia is home to many technology companies benefiting from the AI boom. Be sure to read Nikkei Asia's reporting from the frontlines of the region's AI market.
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My suggested reads
1. Amid the artificial intelligence boom and multibillion dollar investments from the likes of TSMC and Intel, the U.S. is eagerly anticipating massive employment growth in high-tech manufacturing. But in interviews with companies, educators and officials across the country, Yifan Yu confronted an urgent question: Is America training workers for positions that AI will soon make obsolete?
2. Of the myriad clouds hanging over the Thai economy, household debt is one of the darkest. The nation's household debt-to-GDP ratio is 88.2%, the highest among Asia's emerging economies and well above levels considered sustainable. And, unlike in developed countries, much of the borrowing is for consumer goods rather than investment. Economists predict it will take years to reduce the debt to healthy levels.
3. On the eve of the COP30 climate change conference in Brazil, our reporters take a close look at how China has become what one expert calls "the clean energy factory of the world," with surging green tech exports. Yet for all China's manufacturing prowess, observers see little sign it will fill the vacuum growing around global climate policy leadership with the U.S. absent in the Trump era.
Wishing you a wonderful weekend!
Akito Tanaka
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