Artificial Intelligence Drives a Quarter of UK Economic Growth, Faces Global Tech Stock Sell-off Risk

Artificial intelligence is expected to drive about a quarter of the UK's economic growth this year, but it also exposes the UK to the risk of declining valuations of global AI-related assets. AI-related activities, including data center construction and AI model development, are projected to contribute 0.45 percentage points to UK economic growth by 2026, with an overall increase of about 1.8%. Economist Ana Andrade points out that AI technology provides a growth impetus for the UK economy. The report analyzes the extent to which the UK has been affected by the recent sell-off of AI-related stocks, suggesting that it depends on whether the market adjustment evolves into a disorderly decline similar to a financial crisis or a more orderly revaluation. Currently, the contribution of AI to economic growth mainly comes from the production and development of the technology itself, rather than its widespread application across the economy. Andrade states that as AI becomes more widely adopted, its benefits are expected to manifest in productivity improvements across multiple industries. The report further demonstrates that AI is driving economic growth in the UK. The Bank of England previously estimated that the promotion and application of AI technology contributed about one-fifth of economic growth this year.

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