Morgan Stanley warns of imminent massive AI breakthrough in first half of 2026

Morgan Stanley warned that a massive artificial intelligence breakthrough is coming in the first half of 2026. The investment bank said in a new report that most of the world is not ready for the development. The warning is based on an accumulation of compute power at the top United States AI labs. The report cited comments from Elon Musk. Musk has said that applying 10 times the compute to large language model training will effectively double a model's intelligence. Morgan Stanley noted that the scaling laws behind the claim are holding firm. Executives at major United States AI labs are advising investors to prepare for progress that will shock them. OpenAI's GPT-5.4 Thinking model scored 83.0 percent on the GDPVal benchmark. The result puts the model at or above the level of human experts on economically valuable tasks. Morgan Stanley said the curve of progress only gets steeper from here. The bank concluded that pure intelligence forged