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Michael Strobaek, Global Chief Investment Officer at Lombard Odier
Frédéric Rochat, Lombard Odier Managing Partner, opened the first Rethink Perspectives of the year in Zurich in late January with a reflection on the paradoxes that define the current global climate. He described a world of aligned and misaligned voices, of optimism and opportunity, tempered by volatility and uncertainty. “We are navigating along a narrowing ridge,” he remarked, “at Lombard Odier, we’ve always considered it to be one of our essential mission to be close to our clients, to help them regularly rethink the world around us, and, of course, to navigate what will undoubtedly always be relatively volatile and uncertain markets.”
The evening brought together thought leaders to explore two defining themes of our time: how will shifting macroeconomic forces shape investment opportunities in 2025, and what role will artificial intelligence (AI) play in reshaping industries and portfolios? Michael Strobaek, Global Chief Investment Officer (CIO) at Lombard Odier, opened the event by examining the macroeconomic and market outlook for 2025, delving into the trends shaping the US and global economies, outlining both risks and opportunities for investors. Alexandre Pouget, Professor of Computational Neuroscience at the University of Geneva, then offered a unique perspective on AI, a force redefining industries and portfolios alike, analysing its transformative potential as well as the challenges it presents.
Framing the conversation around innovation and change, the discussion first turned to financial resilience and market dynamics in an evolving global landscape.
Frédéric Rochat, Managing Partner at Lombard Odier
Global markets in motion: insights from key regions
In an era of global transformation, the economic landscape of 2025 demands strategic analysis and insight. Geopolitical shifts, technological disruption, and economic recalibration present both challenges and opportunities for investors.
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Michael Strobaek opened by emphasising the resilience of financial markets in 2024, highlighting the impact of central banks' interest rate policies since 2022, which helped to lower inflation in the US and Europe. He described this as a key driver of equity and bond market moves. Against this backdrop, Strobaek's macroeconomic outlook explored the forces reshaping international markets.
United States: leveraging technology and policy for growth
Strobaek described the US economy as a leader in post-pandemic recovery, driven by strong consumer spending, technological innovation, and strategic interventions. He highlighted the strength of the consumer and the US's dominance in AI and tech. Likely policy shifts under Donald Trump, such as deregulation and protectionism, favour an overweight position in US assets, said Strobaek, and stressed the dollar’s continued strength and the importance of leveraging America’s economic momentum.
China's economy faces structural challenges as it transitions to an export-focussed model. Michael Strobaek noted a growth slowdown, with debt issues and low consumer confidence constraining domestic consumption. He highlighted China’s pivot to exports, such as electric vehicles, as part of the country’s efforts to maintain economic momentum.
Europe: balancing economic fragility and political shifts
European economies face political uncertainty and vulnerabilities. Strobaek described the region as "in a precarious situation", citing political uncertainty, with the French political crisis1 and Germany’s imminent elections in February 20252, which present challenges for long-term planning. The euro has experienced volatility amid concerns over US trade tariffs, and European Central Bank rate cuts that are expected to go further than those of the Federal Reserve.3 Growth is also constrained by structural issues, such as consumers’ conservative saving patterns. Compared with the US’s innovation-driven momentum, Europe struggles to maintain competitiveness, further emphasising the need for economic recalibration.
As markets adapt to these global shifts, what role will AI play in determining future economic leadership?
Redefining intelligence: the geopolitical power of AI
Artificial intelligence was a pivotal theme in Michael Strobaek's analysis, with emphasis on its geopolitical and economic implications. He suggested that AI represents a potential paradigm shift in economic growth, with profound implications for productivity across sectors. "AI is coming with a vengeance," he said, highlighting its transformative potential beyond conventional applications.
Strobaek discussed Trump’s announcement of a USD 500 billion investment in AI, framing it as a strategic move to maintain dominance. He stressed the critical role of AI in military systems and the geopolitical edge it provides.
An illustration of the rapidly evolving AI landscape emerged in the few days following this conference, as China positioned itself as a challenger in the race for technological supremacy. The unveiling of DeepSeek's AI model, prompted a selective market selloff focussed in some leading US tech companies.
Alexandre Pouget, Professor of Computational Neuroscience at the University of Geneva
Expanding on the role of AI in reshaping global markets and governance, Professor Alexandre Pouget followed by examining its broader implications for human behaviour and innovation. Echoing Michael Strobaek’s concerns about regulation, he argued that the pace of AI development demands international collaboration and warned of unchecked AI advancements in military applications. Professor Pouget pointed to investments by the US, China, and Russia in autonomous defence systems and the rising geopolitical tensions they generate.
AI’s next challenge: mastering emotion, autonomy, and creativity
Professor Pouget's presentation covered further key AI-related themes, beginning with a discussion on AI and emotions. He highlighted the importance of emotional simulation in enabling AI to effectively engage in social contexts, explaining that while AI does not experience emotions as humans do, it can replicate emotional responses convincingly. “Everything you experience is a result of your neurons talking to one another. As long as we can simulate this, we'll be able to simulate all aspects of the human mind, including emotions”, he theorised.
Professor Pouget also explored the concept of free will, linking it to the brain’s predictive mechanisms. He explained that while the deterministic nature of physics challenges the idea of true free will, the human brain's ability to predict and simulate actions gives rise to a sense of agency. This process, he suggested, underpins the feeling of being in control of one's actions, even when those actions are shaped by predictions. He also noted that AI systems are beginning to emulate these brain mechanisms, which raises important questions about autonomy and decision-making in machines.
Professor Pouget also highlighted the increasing creativity of AI, citing a recent study by a Stanford University’s team in which large language models outperformed domain experts in generating innovative research ideas.4 He remarked that this is only the beginning, suggesting that AI could soon contribute to solving humanity's greatest challenges, such as curing diseases like cancer or unlocking the mysteries of dark matter and energy.
The discussion highlighted the transformative and disruptive nature of AI. Its capabilities to simulate emotion, foster creativity, and make autonomous decisions are rapidly evolving, but so are the ethical and regulatory challenges it poses.
Financial markets are complex, dynamic social systems that you cannot easily fit a model onto. While AI models are sophisticated, they cannot predict extreme events that markets are exposed to constantly. Our success comes from applying human judgment, teamwork, and humility in portfolio management
Looking ahead: navigating investment opportunities in an AI-driven world
The global economic outlook for 2025 reflects an interplay of monetary policy, geopolitical realignments, and technological disruption. Global equity and bond markets have demonstrated remarkable resilience, with significant gains in 2024 across US indices and gold following central banks' interest rate cuts. As markets price-in further changes in monetary policy, the US economy maintains its leadership position. However, the geopolitical landscape continues to evolve, with intensifying US-China competition for AI supremacy. These technological rivalries, combined with ongoing conflicts in Ukraine and the Middle East, continue to affect global trade dynamics and energy markets.
"Financial markets are complex, dynamic social systems that you cannot easily fit a model onto," Michael Strobaek stated. "While AI models are sophisticated, they cannot predict extreme events that markets are constantly exposed to. Our success comes from applying human judgment, teamwork, and humility in portfolio management." This underscores Lombard Odier’s investment approach, which emphasises balanced portfolio construction in response to these many challenges. A successful strategy requires carefully calibrated exposure to key sectors and regions, while maintaining adequate defensive positions through traditional haven assets like gold and the Swiss franc. This balanced allocation provides the resilience needed to navigate potential volatility while capturing opportunities in an complex global environment.
This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
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