The Milken Institute Global Conference continues in California, with Lazard (LAZ) President Ray McGuire joining Yahoo financial executive editor Brian Sozzi and anchor Akiko Fujita to discuss sector outlooks, AI investments, election risks, and more.
McGuire says that investors approach markets from two perspectives: “What’s in front of us and what’s ahead of us.” Regarding the immediate concerns, he notes that Lazard patrons are primarily focused on “the impact of inflation, the markets, and valuations,” as well as the Federal Reserve’s policy decisions. On the other hand, the “what’s ahead of us” perspective focuses on geopolitical and geo-economic risks that may materialize.
Turning to the generative AI front, McGuire highlights the energy requirements associated with this rapidly evolving technology. He cites the Chips Act, emphasizing “the recognition that we need to be able to manufacture our own chips.” This realization has prompted companies to invest heavily in capital expenditures, driving the construction of data centers and other AI infrastructure. However, McGuire says this movement will force the United States to simultaneously develop new energy sources to support the demand.
As the US presidential election nears, McGuire notes that companies are “actively” considering the potential outcome and its impact on markets. Lazard aims to assist organizations with “scenario planning” for such pivotal events. However, McGuire notes that the risks extend beyond just the US election, as global elections could significantly influence supply chain investments.
McGuire characterizes the current regulatory environment as “a headwind.” He emphasizes that regulations “have become a factor in ways they haven’t historically” when companies contemplate development or expansion through mergers, acquisitions, and other deals.
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