Barclays Research Expects AI to Recast Global Supply Chains and Labor Markets

In this year’s edition of the Equity Gilt Study, Barclays Research analysts delve into the transformational power of AI, offering a long-term view on how AI-driven disruption and other structural forces are likely to shape the global economy in the years ahead. Beyond the technological shifts, analysts find that AI will accelerate major changes across supply chains, labor markets and the future of work. 

“AI is already changing many aspects of the modern economy and financial markets and will continue to do so for years to come” says Ajay Rajadhyaksha, Global Chairman of Research. "The end result promises to be fascinating – and most likely a net positive for the world at large.”

The Geopolitics of Minerals and Minds

Barclays Research highlights the strategic vulnerabilities created by the global reliance on a handful of countries for critical rare earth elements and skilled talent. Barclays analysts warn that this concentration threatens supply chain stability amid rising geopolitical tensions, trade disputes and climate-related shocks.

AI and the New Skills Divide 

Drawing on eight years of data, Barclays analysts find that while AI’s overall effect on employment remains modest, it is already reshaping expectations of skills and tasks, especially in higher-paid, white-collar roles. As adoption accelerates, the potential for broader macroeconomic effects continues to grow.  

AI’s Market Divide

Barclays analysts argue that the spread of AI could have far-reaching implications for investment returns, drawing parallels to past technological revolutions such as the post-WW2 revolution in durable goods, the rise of the internet in the 1990s and the data boom of the 2010s. AI could drive gains in equities, upward pressure on yields across the curve and a moderately stronger dollar.

Deep Impact 

The sudden emergence of DeepSeek from China was a “Sputnik moment” for the US and other developed markets, galvanizing a new wave of investment in AI infrastructure. Barclays analysts believe that the capital expenditure arms race has further to run, not least due to the vast computing power needed for emerging, multi-step workloads.

Notes

Barclays Equity Gilt Study is a flagship annual publication that combines market-leading macro analysis with a unique multi-asset dataset spanning over 100 years. It provides uniquely rich data and commentary on long-term asset returns in the UK and US. Data for the UK goes back to 1899, while the US data, provided by the Center for Research in Security Prices at the University of Chicago, runs from 1925.

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