Recent losses in semiconductor shares have sharpened investor questions about returns on AI infrastructure, while UBS Chief Executive Sergio Ermotti said political uncertainty could delay economic gains.
Reuters reported that Ermotti made the comments at a UBS conference in Sydney on Monday, Nov. 9. He said expectations for how quickly artificial intelligence would deliver economic benefits had run ahead of reality. Ermotti remained positive about AI's long-term potential, Reuters reported, while pointing to U.S. midterm results and debate about building AI infrastructure as factors that could delay progress.
UBS's Chief Investment Office reported that the Philadelphia Semiconductor Index slid 12.3% on Thursday, Nov. 5. The Nasdaq 100 shed about 6.4% that session, while the S&P 500 lost about 4.4%.
State Street Investment Management said global semiconductor shares were already in a 20% drawdown before the midterm elections. Its Nov. 6 analysis said the vote added political and regulatory uncertainty to a correction that had begun earlier.
In its analysis, UBS's Chief Investment Office said investors were assessing whether planned spending on data centers, chips and cloud services would generate sufficient returns. The office also pointed to a financing risk: smaller providers that borrow to add data-center capacity still need to repay loans if use of that capacity falls short of expectations.
Ermotti also said the Credit Suisse integration had slowed some of UBS's own AI implementation, Reuters reported. UBS's third-quarter release said about 90% of legacy Credit Suisse IT applications slated for retirement had been fully decommissioned as of Sept. 30, and that the integration remained on track for completion by year-end. EconoTimes previously reported on how the Credit Suisse integration affected UBS's AI deployment.
