By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Philip Lane said Friday artificial intelligence was already making a significant contribution to euro area growth, with spending on AI adoption supporting activity and European firms participating in the global AI supply chain.

“AI is currently a significant contributor to growth in the euro area,” Lane said in a speech at a Federal Reserve Bank of San Francisco symposium, citing both expenditure on adoption and European firms’ role in supplying the global AI buildout.

ECB surveys indicate that AI has added about 10% to firms’ capital expenditure plans this year, Lane said. Digital investment in the euro area has meanwhile risen 73% in real terms since 2014, increasing from 2.3% to an estimated 3.3% of GDP.

AI-related demand had helped euro area activity hold up over the last two years, according to Lane, while AI had been the main driver of global goods trade over the past year and AI-related euro area exports and imports were growing rapidly.

The impact of rising prices for AI-related goods on headline inflation remained limited, however, reflecting the relatively low weight of AI-exposed goods in the consumer price index, he said.

AI adoption was also spreading rapidly among workers, with the share of euro area employees reporting that they used AI at work doubling to 52% from 26% in 2024, Lane said.

The median working AI user reported saving three hours a week, equivalent to around 7.7% of median working time, although efficiency gains varied considerably across tasks and users, he said.

Lane said European workers were on balance positive about AI’s effect on their employment prospects, although adoption remained uneven and the technology’s broader economic effects were far from settled.

“[T]he 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,” he said.

An ECB model simulation of a 30% global productivity increase in IT services produced a 3.8% increase in euro area output by 2030 and a 4.1% long-run gain, while long-run consumption rose 5.5%, Lane said.

The gains would not be evenly distributed, according to the simulation. Employment in the IT sector fell 4.4% by 2030 even as real wages there rose 4.3%, while the model showed real wage gains spreading more broadly through the economy.

The inflation effect in that simulation was limited, with prices initially declining before inflation returned to target and the policy rate moved back close to baseline, Lane said.

AI was also already having a noticeable effect on euro area credit dynamics, he said. ECB internal estimates indicated that the AI boom accounted for around 0.9 percentage point of additional aggregate annual credit growth, equivalent to roughly one quarter of total credit growth in the first quarter of 2026.

Since early 2025, AI developers and adopters had increased leverage by between 1 and 1.5 percentage points more than comparable firms not exposed to AI, with the increase in debt particularly visible in marketable securities, Lane said.

Europe’s relatively shallow equity markets and less developed venture-capital sector meant AI firms relied more heavily than their U.S. counterparts on debt financing, especially bank funding, to expand, he said.

That financing structure also had implications for monetary policy transmission. Lane cited empirical evidence showing that after an interest-rate increase, patenting by AI firms declined by around 1% more than at comparable non-AI firms.

The greater sensitivity reflected the high financing needs of AI firms combined with fragmented euro area capital markets, which induced them to rely excessively on forms of external financing that were particularly sensitive to the monetary policy cycle, he said.

Lane also warned that fast-developing AI was increasing operational risks for banks, particularly through cybersecurity. IT, cybersecurity and related incidents accounted for 10% to 12% of operational-risk events in 2025, nearly twice their incidence in 2018, although associated losses remained contained overall.

Despite the rapid expansion of investment and adoption, Lane stressed that the ultimate economic effects remained uncertain and said monitoring AI’s near- and medium-term implications would remain high on the ECB’s analytical agenda.