Philip R. Lane: AI adoption in Europe

Treść komunikatu w języku oryginału (angielski).

My aim today is to describe how AI is reshaping the euro area economy. [ 1 ] Although the development of frontier AI models is primarily taking place in the United States and China, the adoption of AI will be a key determinant of European productivity growth in the coming years, while expenditure on AI adoption also currently constitutes a significant stimulus to the euro area economy. [ 2 ] In addition, European firms are part of the global AI supply chain, while European investors are contributing to the funding of the global buildout of AI infrastructure through equity and debt markets and the banking system.

I will also describe the key patterns we see in the data, with a primary focus on how the surveys conducted by the ECB can provide insights into the AI adoption process and the implications for the financial system. [ 3 ] [ 4 ]

Aggregate trends

Digital investment in the euro area has expanded by 73 per cent in real terms since 2014, increasing from 2.3 per cent to 3.3 per cent of GDP (Chart 1a). While digital investment has grown far more quickly in the United States, the surge in digital investment (with an estimated clear acceleration since 2024) marks a distinct shift in the structure of the euro area economy. [ 5 ] As shown in Chart 1b, in the euro area digital investment has primarily been in intangible assets, while investment in data centres has constituted a relatively small share. [ 6 ]

b) Digital investment proxy, euro area, with asset breakdown

Sources: Eurostat, ECB and ECB calculations.

Notes: Chart 1a shows the digital proxy for the euro area business economy, at constant 2020 prices, indexed to 2014. The blue dots for 2025 and 2026 extend the digital investment proxy based on the annual growth of an output proxy for digital services (weighted non-seasonally adjusted production of publishing activities; computer programming, consultancy and related activities; and information service activities). Chart 1b shows a digital proxy which refers to (i) investment in non-residential buildings and structures in the information and communication sector, (ii) information and communication technology (ICT) equipment in the business economy, (iii) investment in computer software and databases (CSDBs) in the business economy, excluding the ICT sector, and (iv) total intellectual property products (IPP) investment (in CSDBs and research and development) by the ICT sector. Missing country values are estimated based on known euro area aggregates of country-sector shares. On a whole-economy basis, digital investment has increased from around 2.3 per cent of euro area GDP in 2014 to 3.0 per cent in 2024 (and looks to have increased to 3.3 per cent by the end of the first half of 2026, on the basis of updates of digital services output). The latest observations are for 2024 for euro area annual accounts and July 2026 for euro area production data.

In the ECB Corporate Telephone Survey, firms report that AI has added about 10 per cent to their capital expenditure plans this year. AI-related demand has helped activity to hold up over the last two years – as reflected by the contributions of the “computers and other electronics” and “information and communication services” sectors to total market production (Chart 2a). As illustrated in Chart 2b, Purchasing Managers’ Index (PMI) indicators show that output, employment and new orders have developed considerably more favourably in the technology equipment subsector than in other manufacturing subsectors. For services, the software subsector has performed better than other services sectors in terms of output, albeit not in terms of employment and new orders.

Effects of the global AI boom on euro area output

b) PMIs for technology equipment and software in manufacturing and services

(cumulated changes since January 2025 in per cent)

(diffusion indices, average January-September 2026)

Note: The latest observations are for July 2026.

Sources: S&P Global and ECB calculations.

Notes: Sectoral labels are taken from the July Global PMI press release. The latest observations are for September 2026.

AI has been the main driver of global goods trade over the last year (Chart 3a). European firms are contributors to the global AI supply chain. Table 4 shows that AI-related exports and imports are growing quickly in the euro area, especially in relation to core data centre goods, which contain directly deployed hardware components related to AI compute, storage and networking capacity. Possibly related to differences in composition, the increase in AI import prices in the euro area is more muted than for the other major economic regions (Chart 3b). Chart 5 shows that, while AI-related price increases have contributed materially to the 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 (13.3 per cent in the non-energy industrial goods subcomponent and 3.4 per cent of the HICP).

Trade in goods and import prices of AI goods

(annual percentage changes, percentage points; de-meaned)

(annual percentage changes, three-month moving averages)

Sources: Trade Data Monitor and ECB staff calculations.

Notes: The figures are nominal data. Values are deviations from their respective mean over 2019-2023. “AI-related” reflects a basket of goods related to the construction and operation of AI data centres estimated by Emter et al. (2026) following Waugh (2026). The latest observations are for the second quarter of 2026.

Sources: Trade Data Monitor, ECB and ECB staff calculations. Notes: Import prices are calculated as unit values. “AI goods” is a basket of goods related to AI data centre construction (Emter et al. 2026; Waugh 2026). Unless otherwise indicated, prices are in US dollars. “Asia – AI exporters” includes Hong Kong, India, Indonesia, Malaysia, Singapore, South Korea, Taiwan, Thailand and the Philippines. The latest observations are for July 2026 for the euro area, Asia and Global, August 2026 for the United States and September 2026 for China.

Trade in AI-related goods and subcomponents

(percentage of total trade; annual growth, percentage)

Sources: Eurostat, Trade Data Monitor and ECB staff calculations. Notes: The table shows the share and growth in values. Rest of the world refers to the world excluding the euro area and the United States. 2023 shares are the shares of imports/exports in total imports/exports of the respective country or region. “AI-related trade” refers to goods related to the construction and operation of AI data centres (Emter et al., 2026; Waugh, 2026). “Core data centre goods” are directly deployed hardware components related to AI compute, storage, and networking capacity. “Data centre infrastructure goods” are physical infrastructure goods required to power, cool, and operate data centre facilities. “Other AI-related goods” are upstream AI goods and broad industrial goods used in AI production.

Price pressures from rising prices for AI goods

a) Consumer product exposure to AI goods

Sources: Trade Data Monitor, BEA (US Bureau of Economic Analysis), Eurostat and ECB staff calculations. Notes: “AI goods” is a basket of goods related to AI data centre construction (Emter et al. 2026; Waugh, 2026). The data are based on US BEA tables (2017). Exposures are weighted by AI share, based on 2025 nominal trade data.

Sources: Eurostat and ECB staff calculations. Note: HICP weights in 2026.

In relation to trade in services, Chart 6 shows a significant upward movement in software licence imports from the United States since 2022, consistent with increased purchasing of AI licences from the leading US firms. [ 7 ]

Euro area intellectual property products imports

Euro area payments for the use of intellectual property products (imports)

(four-quarter moving sums in EUR billions)

Sources: ECB (euro area balance of payments), BEA (US Bureau of Economic Analysis, US trade in services) and ECB staff calculations.

Notes: Euro area charges for the use of intellectual property (imports) are based on quarterly ECB balance of payments data. The latest observations are for the second quarter of 2026. Imports from the United States are broken down by type of intellectual property using annual shares by type in US exports to the euro area, as reported by the BEA (mirror data). These shares are applied to quarterly euro area imports of intellectual property from the United States for the corresponding year. The latest available BEA data refer to 2025; the 2025 shares are also applied to 2026 quarters.