Digital investment across the euro area has expanded by 73 per cent in real terms since 2014, rising from 2.3 per cent of GDP in 2014 to 3.3 per cent by the end of the first half of 2026, with an estimated clear acceleration since 2024, according to Philip R. Lane, Member of the Executive Board of the European Central Bank. Speaking at the Federal Reserve Bank of San Francisco Economic Research Symposium on AI and the economy, Lane described AI adoption as a key determinant of European productivity growth in the years ahead, while also noting that AI-related expenditure currently constitutes a significant stimulus to the euro area economy.

Although frontier AI models are primarily being developed in the United States and China, European firms are active participants in the global AI supply chain, and European investors are contributing to the funding of global AI infrastructure through equity and debt markets and the banking system.

Within the euro area, digital investment has been weighted primarily towards intangible assets, with data centre investment accounting for a relatively small share. In an ECB Corporate Telephone Survey cited by Lane, firms reported that AI has added about 10 per cent to their capital expenditure plans this year. AI-related demand has helped sustain activity over the last two years, reflected in contributions from the computers and other electronics and information and communication services sectors to total market production.

Purchasing Managers' Index data show that output, employment and new orders have developed considerably more favourably in the technology equipment subsector than in other manufacturing subsectors. In services, the software subsector has outperformed other services sectors in terms of output, though not in terms of employment and new orders.

AI has been the main driver of global goods trade over the last year. Euro area AI-related exports and imports are growing quickly, especially in core data centre goods — hardware components related to AI compute, storage and networking capacity. The increase in AI import prices in the euro area has been more muted than in other major economic regions. While AI-related price increases have contributed materially to an upward shift in goods inflation, the impact on headline inflation is limited owing to the relatively low weight of AI-exposed goods in the consumer price index, which carry a weight of 13.3 per cent in the non-energy industrial goods subcomponent and 3.4 per cent of the Harmonised Index of Consumer Prices.

This article is based on a primary source and has undergone editorial review prior to publication.