The AI Advantage: How Artificial Intelligence is reshaping business and investing

Artificial Intelligence (AI) is no longer a futuristic concept, it’s a powerful force shaping industries, investments, and economies worldwide. For New Zealand, AI presents both opportunities and challenges, from enhancing financial decision-making to transforming the workforce to deliver the productivity gains the country needs.

At ASB, we are looking at how we start to apply new technologies into our business processes to simplify and improve experiences for our customers and our people. On behalf of our investment clients, we’re working alongside our investment partner, BlackRock; benefiting from the depth of knowledge and expertise on AI within their teams.

BlackRock has identified digital disruption and artificial intelligence as one of its five “mega forces” or structural changes that are affecting investing now and into the future.

At a recent client event and live recording of the ASB Investment Podcast, we brought together industry leaders including Managing Director of Systematic Equities at BlackRock Dr Brad Betts, Founder and Director of academyEX Frances Valintine CNZM, and ASB’s Chief Data and Analytics Officer Travis Barker, for a discussion on how AI is revolutionising business, finance, and society, hosted by Nigel Grant, Head of Wealth Product at ASB.

While AI has gained mainstream attention recently, it has been evolving for decades. Dr Betts, an expert in applying machine learning to investing strategies at BlackRock, emphasised that AI’s roots go back to the 1960s, with rapid acceleration in recent years due to advances in computing power and data availability.

"Some of the biggest AI breakthroughs are actually from the 1960s. This stuff has a multi-decade history and it just continues to evolve. It’s achieved a scale that is greater than I ever imagined," Betts explained.

For investors, this long-term trajectory signals that AI is not a passing trend but a fundamental shift in how businesses operate and generate value.

The financial industry is already leveraging AI to improve decision-making, risk management, and customer service. AI-driven models are optimising investment portfolios and detecting market patterns faster than human analysts.

At BlackRock, Dr Betts’ teams utilise AI-powered algorithms to manage over $240 billion USD on behalf of clients (as at 31 December 2024), reflecting its growing role in asset management. However, Betts noted that AI won’t completely replace traditional investing immediately.

"What happens when everyone has access to the same AI-driven tools for investing? I don’t think that is imminent. It may happen in our children’s lifetime, but for now, financial markets remain highly complex, with low signal-to-noise ratios. The information is highly imperfect."

This means AI can enhance investment strategies today, beyond just human expertise and market insight .

AI’s influence extends beyond finance into all industries, from healthcare to retail. Frances Valintine, a futurist and founder of academyEX, stressed the importance of businesses integrating AI into their operations.

"You won’t lose your job to AI. You will lose your job to people who have AI skills," she warned.

For businesses, leveraging AI tools—whether for automation, customer insights, or content creation—is no longer optional. Companies that fail to adapt risk falling behind their competitors.

“It's worth your time, it's worth you to learn more about these technologies, to avail yourselves of them,” Betts urged the audience.

Despite AI’s potential, New Zealand faces several challenges in fully capitalising on this technology. Travis Barker pointed out that AI adoption requires strong regulatory frameworks and talent development.

“We’re a highly regulated organisation and a highly regulated industry, so we’re putting a lot of effort into the guardrails that we put in place to make sure we use AI in a safe and responsible way.  We’re taking guidance from overseas, particularly the EU, but in New Zealand, we might need a little more leadership in the AI space," Barker said.

However, the issue runs deeper than just regulation. Valintine highlighted a looming demographic crisis: an aging workforce, declining birth rates, and an increasing number of retirees.

"If we take this country, like many advanced countries, our birth rate's dropping. We're going to have a large and very significant proportion of people over the retirement age… We're going to need to automate," she said.

Countries like Japan and South Korea have embraced automation to offset similar demographic shifts, and New Zealand must follow suit. Without AI-driven productivity improvements, businesses may struggle with labour shortages, and economic growth could slow as more workers exit the workforce.

Beyond labour shortages, the financial burden of retirement is growing. Fewer workers supporting a larger retired population means increased pressure on superannuation, healthcare, and pension systems. AI and automation could help sustain economic growth by improving efficiency in key sectors like finance, healthcare, and infrastructure—reducing strain on government and businesses alike.

New Zealand also faces a significant talent shortage in AI-related fields. While other countries are producing thousands of AI specialists, local AI education programmes remain small.

“This is a really big barrier for us, that we don’t have this kind of constant research and development culture… We have to learn and we have to unlearn and we have to jump into this because the speed of these tools coming at us is just getting faster and faster,” Valintine urged.

ASB’s Barker noted that ASB is not only thinking about applying new technology to its own systems and processes, but also supporting how NZ Inc could benefit – from both a productivity and investment perspective. 

He outlined the AI value chain and where New Zealand could carve out a competitive edge. 

With established global players already dominating the hardware, computing power and AI models and platforms, there could be some opportunities to provide clean energy to new AI data centres, which will require about 10x the energy of a standard data centre.

However, the biggest opportunity for New Zealand lies in developing AI-driven applications for industries like finance, agriculture, and healthcare.

“How do we create an industry within New Zealand that really starts to innovate on, build on top of all of the other good stuff that's happening in the world?” he asked.

Alongside that, attracting AI talent and integrating AI into businesses will be key to long-term success.

For businesses and investors alike, staying informed and proactive is essential. The panellists offered practical advice for those looking to get ahead in AI:

• Stay Educated: Read AI-focused books like Superagency by Reid Hoffman and Greg Beato or join professional groups like the Association for Computing Machinery (ACM).
• Experiment with AI Tools: Try platforms like ChatGPT, Perplexity AI, CoPilot, and Google’s AI tools to understand their capabilities.
• Engage in AI Conversations: Join AI communities on Substack, Discord, and Reddit for deeper insights beyond mainstream media.

"The guardrails are not going to slow this down. It is going full speed ahead, and we have to jump on that train," Valintine urged.

AI is not just a technological shift, it’s a long-term economic transformation or what BlackRock has termed a mega force. While AI-driven automation will create disruptions, it will also unlock new investment opportunities across industries.

For investors in New Zealand, the key is to stay informed, identify AI-driven businesses, and embrace AI tools to enhance decision-making.

As Betts put it: "We believe in it. Innovate or die."