Artificial intelligence is no longer a future theme, it’s already changing how companies operate today.

Inside businesses, AI is taking over repetitive work. Coding, document creation, and data analysis are increasingly being handled by AI agents. What used to take hours now takes minutes. The result is simple: employees are producing significantly more without companies needing to add headcount.

We are also seeing a clear shift in mindset, from skepticism, to fear, to realization. Not “this will take jobs”, but “we can do far more with the same team”. That’s a meaningful change.

And it matters for markets! Labor has historically been the biggest driver of inflation. But if AI improves efficiency and reduces the need for incremental hiring, that pressure begins to ease. Stronger growth without the same level of inflation is a powerful combination and one that challenges the idea that interest rates need to move higher from here.

There are constraints to the AI takeover, particularly around energy, but they are resolving in real time. Better chips, improved networks, and rising efficiency are driving down the cost of computation. This is not a roadblock; it’s an engineering problem that will likely be overcome. However, in the short term, it bodes well for energy.

The bigger picture is this: AI is removing productivity limits across the economy. That raises the ceiling for growth, for corporate earnings, and ultimately for markets. This is a structural shift and if it plays out the way it’s starting to, the market is underestimating what comes next.

I have also included a piece from our CIBC Economics team entitled “Where’s MY oil well?”.

As always, if you have any questions, please feel free to give us a call at any time.

Have a great long weekend.

Milan