October monthly investment update - Reflections on September 2026

Artificial intelligence (AI) was the defining theme for September as rapid advances continued to generate excitement with investors, yet again boosting the share prices of global technology companies. At the same time, however, concerns intensified around safety, security and controls in the sector.

These two competing forces helped shaped market sentiment during the month and moved AI higher up policymakers’ agendas. It may also have prompted more investors to look beyond the 'single' technology theme to the wider infrastructure and those businesses that could support, and benefit from, AI’s long-term growth.

What did become apparent was the very real concern widely felt by world leaders and AI creators, that artificial intelligence could slip beyond human control and that safety measures should be put in place by those leading the charge.

The month of September saw a number of AI industry leaders calling for a slowdown in the technology by governments and companies, as it was revealed that in July, rogue AI agents (autonomous systems) from software giant, Open AI, hijacked user accounts of an open-source learning platform known as Hugging Face.

In September, chip giant, Nvidia acquired Hugging Face for around $13 billion. But there’s an irony here as the company subsequently released a set of software safety tools during the month specifically aimed at AI agents to prevent such hacks - showcasing the speed at which resolutions to AI problems can be resolved.

As news filtered through to markets about the call for a slowdown, tech-heavy equity markets fell, but quickly rallied, as investors saw it as a knee-jerk reaction. It’s debatable, though, in our view, that anyone would be capable of slowing down the technology which has set the industry alight since the furore around AI began several years ago, and there’s a lot at stake. We’ve mentioned before, in previous updates, about the trillions of dollars already invested, to date, in the industry.

United Nations gathering

On 22 September, 130 heads of state gathered in New York for the United Nations (UN) General Assembly. High on the list of topics for discussion were the conflicts in the Middle East and Ukraine, and those emerging AI risks.

The UN, of late, is struggling to remain front and centre of top world affairs. President Trump has, in recent times, ended, or reduced, US participation and/or funding in some UN bodies such as the World Health Authority (WHO), but is still a paid voting member of the UN.

In his opening speech at the event, President Trump hinted at rebranding 'AI' to 'SI' ('super intelligence'). Industry experts were quick to point out that 'super intelligence' typically describes far more advanced, still entirely hypothetical systems, that exceed human capabilities.

China, traditionally supportive of the UN, didn’t attend the Assembly on this occasion. Instead, President Xi Jinping opted to travel to Washington in advance of a state visit with President Trump, scheduled to take place a few days later.

US–China talks

The US President pulled out all the stops to host a lavish White House summit to mark talks with the Chinese President. The visit overall was reported as being rather cordial and seen more as a way of stabilising relations than anything else.

History tells us there is a lot for the two to discuss: The US and China have long competed over AI, advanced semiconductors, rare earth minerals and cybersecurity, among others, (including a locking of horns in April 2025, over the 'then' recently announced trade tariffs). During the visit, US and Chinese officials announced they were extending their trade truce until 10 January 2027, which both sides see as a way of allowing more time to work on a potentially bigger trade deal.

Investor sentiment widens AI scope

Investment markets, on the whole, would have welcomed the continued US–China dialogue seeing it as a positive step towards reducing the immediate risk of renewed trade tensions. However, with many issues unresolved, they may have seen the talks as a means of stabilising relations rather than a fundamental shift in the two countries’ strategic rivalry.

As AI continues to dominate thinking, investors are starting to look beyond high-profile areas (such as chipmakers and semiconductor companies) to broader related investment opportunities (such as those businesses needed to support AI’s sustainable, long-term growth and scale).

In August, both Microsoft and Amazon company results reassured investors that demand remains solid for the infrastructure that powers AI. The demand could very well be vast and may include anything from utilities and renewable-energy providers (supplying the substantial amounts of electricity AI requires) to grid operators and energy-storage companies (strengthening power networks).

With our long-term investing stance, we continually look across the broader AI ecosystem as, in our mind, it’s these associated companies that will share in the future successes of the industry. This wide-lens view allows our Fund Managers, Investment Analysts, and Sustainable Investment Team, to identify these firms. In recent months, for example, we have been focusing on utilities with a skew towards US electricity generation and associated national grids (given the likely size of the AI industry in America).

Other news

September brought more cost misery for consumers and businesses as the Middle East conflict re-ignited, pushing up the price of oil to its highest point since May: Brent crude oil rose to clearly well over $100 a barrel (translating into higher fuel prices at the pumps). It did ease back slightly towards the end of the month as the promise of ‘tentative’ progress on peace talks appeared forthcoming between the US and Iran.

Inflation, therefore, remained high on the agenda of governments worldwide along with the prospect for central banks to raise interest rates. Some had already acted: In September the US Federal Reserve raised rates for the first time since 2023, and the European Central Bank raised its interest rate for the second time this year. The Bank of England held its rate steady in September but warned that rates may need to rise if the war in Iran persists, predicting that UK inflation could otherwise reach 4% by early 2027.

Bonds yields duly rose sharply during the month as investors were forced to reassess those inflation risks and future interest rate expectations, making September a difficult month for fixed income investors. The UK ten-year gilt yield, for example, reached its highest level since 2007, closing the month at 5.4%.