US shares are clever choice, says HAMISH MCRAE

Never bet against America. That’s the big message for investors from the past week. We’ve had the G7 summit meeting. We had the non-decision on interest rates from the Federal Reserve.

But what stood out was the surge in share prices of the three big enterprises of the artificial intelligence world: Apple, Microsoft, and the new member of the three trillion club, Nvidia.

There is a simple message here, and a more complicated one. The simple message is that investors globally are convinced that generative AI will be the great driver of economic growth for the next decade, maybe longer.

It is technology dominated by the US. Apple, which seemed to be lagging in incorporating AI into its products and systems, launched its own versions at its annual Worldwide Developers Conference – and promptly saw its shares shoot up, so it briefly pipped Microsoft as the most valuable company. Both come in at $3.3 trillion (£2.6 trillion), with Nvidia just behind at $3.2 trillion.

You may or may not agree with the Pope, who told G7 leaders on Friday that AI was both ‘fascinating and terrible’ at the same time, but it has surely done wonders for the portfolios of its investors.

‘Fascinating and terrible’: Since we’re still in the very early stages of the AI revolution, there will be lots more to play for in the years ahead

And since we’re still in the very early stages of the AI revolution, there will be lots more to play for in the years ahead.

The more complicated message is the relationship between business and government, and how what happens to the global economy, and some of the companies that drive it, is much more important than politics. You can see one side of that by looking at the G7 leaders lining up to have their picture taken. All bar the host, Georgia Meloni, are deeply unpopular with their electorates.

One will almost certainly be out of office in three weeks’ time. But this is not just about popularity; it is about relative importance.

With the huge exception of the US, it doesn’t matter that much in our day-to-day lives what political leaders do. You can see this by looking at Labour and Conservative policies here, for the big numbers are broadly similar.

All the talk about borrowing or taxing another £30 billion or so has to be set against the size of the economy as a whole.

Take Labour’s idea of putting VAT on school fees. It will supposedly raise £1.7 billion, though that has been challenged. Our GDP last year was £2,687 billion.

Better still, ask yourself this: what is really different about our lives now from those of 20 years ago? Surely it must be the impact of the iPhone in 2007, and of all the services made possible by that, everything from Instagram and WhatsApp to selfies.

That did not happen because a politician thought it would be a great idea and put taxpayers’ money behind developing it. It happened because Steve Jobs, the leader of a computer manufacturer, had the genius to see a way to create a better mobile phone.

It still produces more than half of Apple’s revenues and arguably is the most important new product this century.

Now look forwards. Anyone wanting a comfortable retirement has to save for a pension. For those who have a public sector pension, it may be that this will be enough, though that is making a judgment on the financial position of governments in 30, 40 and more years’ time.

For the rest of us it means saving now and building a pension pot. That has to be invested. Where do you put the money, or get whoever is managing it to put it? Surely, some of it at least has to be in the US, and specifically in big American corporations.

Of course there have been commercial catastrophes. Look at Boeing now, or just about the whole of the banking sector in 2008. More generally, American equities as a whole are probably overvalued. But time and time again, it is American enterprise that comes up with some new technology that will dominate the world – as it is doing right now.