The Globe and Mail reports in its Tuesday, Jan. 21, edition that Vanguard Group economist Kevin Khang says the growth potential from artificial intelligence and the risks from the U.S. budget deficit have been in a "tug of war" in recent weeks. The Globe's Mark Brugess writes that Mr. Khang says this could continue to play out for years. There is excitement around AI, boosting valuations of U.S. mega-cap stocks and driving market gains, despite the lack of broader productivity growth, says Mr. Khang. Partly due to uncertainty around Mr. Trump's second term and potential budget deficits, markets will continue to be shaped by these two trends over the long term. Mr. Khang says high valuations for U.S. equities suggest that future growth will rely on earnings growth surprises rather than price multiple expansion. Large U.S. tech companies, once benefiting from low capital investment, now face challenges as they invest more in data centres amid a growing AI arms race. Mr. Khang says: "It's one thing to continue to grow 10, 20 or even 30 or 40 per cent when your market cap is smaller. It's another thing to continue to do that when you're collectively 30 per cent of the index."