Highlights

  • Jones told the AFR Super Summit that US IT sector earnings expectations imply growth of 45% per annum indefinitely.
  • At that compounding rate, $1 becomes $2.1 in 2 years, $6.4 in 5 years, and $41 in 10 years, as a simple illustration.
  • Market concentration in the technology sector is the highest since the 19th century, Jones said at the same event.
  • The October 2026 FSR described the financial system as resilient but flagged there is no room for complacency regarding AI risks.

An audience of superannuation fund executives controlling $4.4 trillion in retirement savings heard a striking statistic at the AFR Super Summit in Melbourne on 26 October 2026. Brad Jones, Assistant Governor (Financial System) at the Reserve Bank of Australia, said that current US IT sector earnings expectations implied growth of 45% per annum, indefinitely.

What Jones Said About Earnings Expectations

Jones was speaking on a panel at the AFR Super Summit in Melbourne on 26 October 2026, moderated by James Thompson. The panel included Scott Hartley (Insignia), Deanne Stewart (Aware Super), and Ian Patrick (Australian Retirement Trust). Jones cited the 45% per annum earnings growth expectation for the US IT sector as embedded in market valuations.

The following compounding illustration is this publication's arithmetic, not an RBA calculation: at 45% per annum, $1 becomes approximately $2.1 in 2 years, $6.4 in 5 years, and $41 in 10 years. The question Jones was raising is whether any sector can sustain such expectations indefinitely, and what the implications are if it cannot.

Concentration Risk and Operational Threats

Jones flagged that market concentration in the technology sector has reached levels not seen since the 19th century. High concentration means that a shock to one or a small number of dominant firms can have disproportionate systemic effects. It also raises questions about competitive dynamics, pricing power, and what happens to valuations if earnings disappoint.

He also described operational risk from AI as accelerating in both offensive and defensive dimensions. Firms are using AI in their operations, and threat actors are using AI to probe vulnerabilities. The October 2026 FSR noted both dimensions. Superannuation funds, managing $4.4 trillion, are directly exposed to these operational risks as well as to AI-driven market movements.

The FSR's Overall Assessment

The Reserve Bank's October 2026 Financial Stability Review, published on 1 October, stated: "Optimism around AI is boosting asset prices and has considerable potential to improve productivity and resilience." On the overall system: "resilient, no room for complacency." The FSR also flagged AI debt financing as rising in less transparent forms, which the next article in this series addresses in more detail.

Jones' comments at the AFR Super Summit extended the FSR analysis to the specific audience of superannuation trustees, who must manage AI-related financial risk on behalf of millions of Australians approaching and in retirement.