Good morning. Elon Musk announced yesterday that he plans to spend a “lot less” on political campaigns going forward. Tesla investors rejoiced when Musk stepped away from Doge a few weeks ago, sending shares up more than 5 per cent. But they did not react much this time; Tesla shares inched up just 0.5 per cent on Tuesday. The benefits of having an engaged Musk appear to be priced in. Email us: unhedged@ft.com.

The AI equity portfolio

The US — along with most other developed countries — is facing an impending dilemma. Without sufficient immigration inflows, demographic decline is expected. And, though productivity growth is still strong by many measures, many economists and market watchers believe it will stagnate. There are a range of views about what this all means, but it could imply less output, higher inflation and bigger deficits. 

That is, unless AI saves the day. If it can boost the productivity of workers, AI could help countries overcome demographic challenges and keep growth strong. But that is a big “if”. In market terms, it’s the difference between creating trillions in value for investors, or destroying their hard-earned capital. This is not only true of investors in the magnificent 7 AI stocks; as companies such as Nvidia got more expensive, so did the rest of the market, and we suspect AI had something to do with it: