What Will Shape AI's Path

Citi Research highlights that AI demand is accelerating faster than compute supply, while maintaining a pro-risk investment stance in U.S. and Asian growth equities.

Key Takeaways

• 1.AI demand is growing vertically, but supply growth is far more constrained ('diagonal'), leading to rising costs for compute and inference.
• 2.The incoming Fed Chair (Warsh) is expected to maintain a dovish stance regarding the AI investment cycle and its broader economic impacts.
• 3.Citi maintains a pro-risk asset allocation, favoring AI-linked growth equities in the U.S. and Emerging Markets Asia despite concerns about market narrowness.

Table of Contents

• AI's Path Will Be Shaped by Vertical Walls and Diagonal Supplies
• Three Views of the Global Economy
• U.S. Banks: Takeaways From Our Napa Conference
• European Food Manufacturers & HPC: Where's the Catalyst Path?
• We Revisit Aluminum Stocks Given Upside Expectations
• Foreign Exchange Forecasts: May 2026
• Global Asset Allocation: Narrow, Not Fragile
• Research @ Citi Markets Edition: The Bull-Bear Debate
• Citi Research in the Media

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