AI and the Economy – Growth, Jobs, and Investment

Stanford University's 2026 AI Index Report shows that more money flowed into AI in 2025 than ever before, with investment, adoption, and revenue all reaching record levels.

Here we summarise the key points about AI and the economy. Click here for our overview of the report, and here for our deeper dives on responsible AI, and AI and policy.

Investment has surged

Global corporate AI investment more than doubled in 2025. US private AI investment reached $285.9 billion, more than 23 times the $12.4 billion invested in China. The UK was third with investment at $5.9bn. Generative AI led the surge, growing more than 200% and capturing nearly half of all private AI funding. The number of newly funded AI companies rose 71%. The US again led with the number of new AI companies (1,963), with the UK in second place (172), followed by China (161). Investment is heavily concentrated in a small number of countries, companies and deals.

Where was the investment focussed? According to the report, in 2025, the breakdown of private AI startup investment by focus area "suggests that capital was directed more heavily toward segments closest to building and scaling AI systems. The category of AI infrastructure, models, research, and governance attracted the largest share of funding, reaching $143.2 billion. As this category combines several types of priorities, the trend is best interpreted as evidence of growing investment in the foundational layers of the AI ecosystem rather than a precise measure of any single one of those areas.""

Adoption is at record levels

Organisational AI adoption reached 88% of surveyed organisations, up from 78% in 2024. Generative AI reached 53% population adoption within three years of mass-market introduction, faster than the personal computer or the internet. The estimated value of generative AI tools to US consumers reached $172 billion annually by early 2026. This is measured by consumer suprplus, how much someone would be willing to compensated for should all their generative AI tools be removed, reflecting that those tools are often accessed for free. The report notes that this "consumer surplus figure dwarfs estimated U.S. generative AI revenues, suggesting that the social returns from the technology far exceed the private returns captured by producers. This pattern is consistent with findings that innovators historically capture only ~3% of total social returns from major technologies."

Productivity gains are appearing — unevenly

According to the report, in 2025, organisational adoption of AI continued to expand in both usage and function. 88% of respondents to one survey reported using AI one business function (up from 78% in 2024) whilst half of respondents reported three or more business functions leveraging AI. This expanded adoption of AI was seen across all regions, though at different rates.

Deployment and productivity are also having uneven impacts across different types of organisations and within organisations. IT, marketing, and knowledge management functions show greatest signs of AI use, whilst professional services, technology, financial services and healtchare sectors show high AI use. According to a separate study, greatest positive impacts are in innovation, employee and customer satisfaction, and competitive differentiation. However, there are reported negative impacts on costs and employee satisfaction.

If you would like to discuss how current or future regulations impact what you do with AI, please contact Brian Wong, Tom Whittaker, Lucy Pegler, Martin Cook, Liz Griffiths or any other member in our Technology team. For the latest on AI law and regulation, see our blog and newsletter.

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