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TCorp economics paper highlights broader impacts of AI on economies and implications for corporate profits over the longer term

Published 22 December 2025

Sydney, 22 December 2025 – AI has the potential to boost corporate profits and improve productivity across global economies, but the gains will depend on factors such as the availability of electricity and computer chips, according to a new paper from TCorp Chief Economist Brian Redican and Senior Economist Emily Perry.

In their paper, our economics team examine how AI will affect productivity and growth across economies and whether stock markets are realistically assessing how profitable AI will be. They conclude that the surge in AI investment and associated infrastructure is already an important driver of economic growth and financial markets.

“The longer-term, transformative promise of AI rests on its ability to drive a sustained increase in productivity that is enjoyed across sectors and economies. Productivity gains will likely be subject to key economic constraints, including limits on resources such as energy and computer chips, as well as how gains are shared, or not shared,” write Redican and Perry.

“If firms manage to retain most of those productivity gains, then profits will potentially grow at a faster rate than in the past.’’

According to the paper, the investment boom may not pay off for all technology firms undertaking the investment. The ‘winners’ of AI may also not necessarily be the companies that create it or use it.

“For investors, the path to sustained profits is far from guaranteed,” they write. “Even if AI proves to be transformative, economic principles suggest that the core AI technology may not retain its high value over time and the huge pipeline of investment may eventually fade.”

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The full report can be found here. 

Media contact:
mediaenquiries@tcorp.nsw.gov.au