In the second episode of “On the Horizon,” Fawaz Chaudhry, Partner and Head of Equities, discusses:
- DeepSeek’s R1 model significantly reduces AI training costs
- Less hardware may be needed, though lower costs could drive greater AI adoption and offset this
- Tariffs create uncertainty and act as a sales tax, impacting consumer and corporate investment spending
- Global risks are rising, with China’s real estate crisis ongoing and Europe vulnerable to further US trade actions
- Stock valuations are high, and the AI-driven rally may fade if economic activity slows
- Defensive sectors are better positioned in a slowing economy
- The auto sector is particularly vulnerable to tariff impacts
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