Templeton Chief Executive Officer Jenny Johnson said short-term debt issued by major technology companies offers investment opportunities in artificial intelligence, citing strong cash flows and balance sheets.

Johnson said these companies are well funded not just with traditional creditors. The debt structure now includes off-balance-sheet instruments guaranteed by hyperscalers and suppliers who also act as lenders, making it “very complex.”Longer-term holdings also expose investors to advances in technology that may be uncertain.

“Going longer-term on those would be a little bit more scary for me,” she said in a Bloomberg TV interview from the sidelines of the Milken Institute Asia Summit in Singapore. “But you know, two-year paper at nine, pretty dang good!”The AI story has yet to transform traditional business sectors, and the real productivity gains are still ahead, Johnson said. The current 2% productivity gains in the US reflect technologies that have been around for the last two decades, and it will take time for AI to work its way into the system.

“The AI story has not played out at all in sectors and traditional businesses,” Johnson said. “That is to come.”Johnson pointed to healthcare as an example of early AI impact beginning to materialize, with companies reporting a bigger pipeline of potential drug discoveries and greater precision in clinical trials that could lead to higher efficacy and faster regulatory approval.