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Lagarde says Europe needs to build more AI at home
The ECB president pointed to ECB staff estimates that AI-related borrowing drove about a quarter of growth in credit to firms in the first quarter of this year.
European savers are again channeling funds toward transformative technology in the United States, a dynamic Christine Lagarde highlighted in remarks tying today’s AI boom to earlier waves of cross-border capital investment. Lagarde said the historical pattern dates to the late 19th century, when European money supported major projects abroad, before financial crises hit in 1873. She argued that, as with that prior era, Europe can benefit from AI this time, but only if the region is clear on why the technology is needed and what portion must be built in Europe rather than simply purchased.
She said euro area households hold about €440 billion in US technology firms and that euro area firms are expected to devote around 10% of total investment to AI in 2026. Lagarde added that ECB staff estimate AI-related borrowing accounted for about a quarter of the growth in credit to firms in the first quarter of this year.
On adoption, Lagarde said the share of euro area workers using AI on the job has doubled in two years and now exceeds 50%, noting it took the internet about a decade to reach a similar level. She also cited a competitiveness gap, saying US digital investment has grown twice as fast as in the euro area over the past two years, and US workers spend more time using AI during the workweek than workers in the largest euro area economies.