ECB’s Lane Says AI Significant Contributor to Euro-Area Growth

European Central Bank Chief Economist Philip Lane said the euro zone economy is being buoyed by artificial intelligence as companies invest in the technology and benefit from its rollout across the globe.

“AI is currently a significant contributor to growth in the euro area, driven by both expenditure on AI adoption and the role of European firms in the global AI supply chain,” Lane said in speech in San Francisco on Friday. “Surveys of firms and households indicate significant AI adoption rates, albeit unevenly distributed across sectors and demographic groups.”

The euro-area economy grew 0.4% in the third quarter, with strength in AI-related sectors being one of the bright spots. Recent ECB exchanges with companies showed there was a “very strong” rise in demand for high value-added electronics, electrical equipment and related machinery.

The phenomenon has been even more pronounced in the US, where skyrocketing investments in data centers and other infrastructure have been a key pillar of this year’s economic growth. But the spending has also eaten into profits of big tech firms, leading to deep selloffs of their shares after disappointing results in recent days.

“Surveys of firms and households indicate significant AI adoption rates, albeit unevenly distributed across sectors and demographic groups,” Lane said. “However, the AI adoption process is still at a relatively early stage and the extent and timing of the economy-wide transformative potential of AI remain highly uncertain.”

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