IMF warns AI gains could widen EU divides

The International Monetary Fund warned that AI could raise productivity in Europe by around 1% over five years while also deepening economic inequality, increasing pressure on power grids and exposing the EU to greater reliance on foreign technology.

The assessment, prepared for an informal meeting of EU finance ministers in Dublin, said the benefits and costs of AI adoption are likely to vary across countries, regions and workers. Completing the EU single market could help distribute AI adoption and economic gains more evenly across the bloc’s 27 member states.

Labor market exposure is a central concern. The IMF estimated that about 60% of workers in advanced European economies are in occupations significantly exposed to AI. Some workers may become more productive with AI tools, while others could be displaced as routine tasks are automated, with more advanced EU economies positioned to capture larger gains.

Energy demand is another pressure point. Europe’s data centers already consume around 3% of the continent’s electricity, and AI growth is expected to increase demand sharply, especially in hubs such as Frankfurt, London, Amsterdam, Paris and Dublin. The IMF called for investment in cross-border grid infrastructure, deeper energy market integration and stronger domestic AI capacity to reduce dependence on the United States and China.