The investment firm warns AI-driven gains may concentrate in tech, defense, and power while starving other sectors.
KKR expects artificial intelligence to drive a prolonged productivity boom but cautions growth will favor a handful of industries. The firm’s mid-year report highlights tech, high-end services, and government spending as areas poised for outsized gains, while others face stagnation or decline.
The report compares current trends to the late 19th-century industrial revolution, predicting extreme disparities in economic performance. Defense and power sectors are identified as long-term winners due to global supply chain security concerns, despite higher input costs.
KKR remains cautious on China due to its property sector drag but sees potential in Japan and Korea, where earnings may surprise positively in 2026-2027. The firm’s outlook underscores a polarized investing landscape with uneven opportunities.