New FT Poll Shows: The Future of AI Could Be Good News for International Stocks

The artificial intelligence (AI) trade is the central driving force of the U.S. stock market. Major U.S. tech companies are investing hundreds of billions of dollars to develop leading-edge AI models and hopefully create the must-have, must-use business productivity tools of the future.

But one big question in the stock market right now is, "Who will be the biggest winners of AI?" A new survey of economists from the Financial Times, published Oct. 17, found that the answer might be everyone.

Let's look at what the data might mean for the future of international stocks -- and how it might affect your investments.

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Who will lead the future of AI? Maybe not just America.

There are a lot of strong opinions and extreme predictions about the future of AI.

Some tech executives have warned that AI could soon destroy most jobs, or could even lead to human extinction. Other industry critics worry that, even if it doesn't destroy lots of jobs, AI will contribute to wider inequality and disparities in the economy -- especially if the biggest gains and profits from AI go to the types of companies and workers who were already highly successful and highly paid.

And for stock investors, there's a fundamental question of how to invest for the future of AI. Will the biggest profits of AI go to the AI stocks of the tech-heavy Nasdaq-100 or will AI benefit the "non-AI" economy in more widespread ways?

The Financial Times survey of economists shows that the future of AI could be more hopeful than the skeptics and doomsayers predict. The poll found that 54% of economists believe AI will deliver significant gains in economic growth and productivity in the next 10 years. And those gains will go not just to the U.S. and China (where many of today's leading AI models are being developed), but to many or nearly all nations of the G20.

If the economists surveyed by the Financial Times are on target, this is a good sign for the world economy and for international stocks. AI won't necessarily just be a good thing for the AI stocks of companies that are building the AI tools and solutions of the future; AI could make everyone a bit richer. The gains could go to a wide range of companies, sectors, and countries.

The economists also believe that AI won't create large-scale job losses. There might be some disruptions and job losses that affect some industries and countries more than others, but AI will also create new jobs that we might not know how to describe yet. And labor-saving productivity gains from AI don't have to bring layoffs. Instead, getting more work done with fewer people (but with AI support) could help countries around the world cope with aging populations and shrinking workforces.

The future of AI looks bullish for the rest of the world, not just America and China. That's good news for international stock investors.

How to buy international stocks for the future of AI

The Financial Times didn't recommend any specific stocks, sectors, or exchange-traded funds (ETFs) to invest in based on its research. But if you agree that the future of AI could bring widespread growth around the world, you might want to invest beyond the U.S. stock market and in different sectors other than tech ETFs.

Vanguard's recent research has echoed the sentiments of the FT economist survey. Vanguard's analysis projects that the biggest productivity and profit gains from AI will go to companies that use AI technology, not necessarily the companies that are building AI. As part of that AI future, Vanguard's forecast expects international stocks ("global ex-U.S. equities, unhedged") to outperform U.S. stocks in the next 30 years.

One easy way to buy international stocks with a low-cost index fund is the Vanguard Total International Stock ETF (NASDAQ: VXUS). This international ETF holds an impressively diversified portfolio of 8,901 stocks representing 43 countries. In the past 10 years, VXUS has delivered about 9.2% annualized returns, which is lower than the S&P 500 index long-term average of 9.98%. This international stock ETF delivered about 9.4% annualized returns for the past five years.

But if you're concerned that U.S. tech stocks won't lead the world forever, if you want to protect your money from the risk of a weakening dollar, or if you want to diversify beyond the U.S. market, the Vanguard Total International Stock ETF could be a good choice for long-term investors. If the rest of the world ends up getting richer from AI, you can own a share of that future wealth.

Ben Gran has positions in Vanguard Total International Stock ETF. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.