London: The surge in artificial intelligence (AI) investments is beginning to influence European currency markets, with the Swedish krona and British pound emerging as notable beneficiaries. In 2024, both Sweden and the UK received over $4 billion each in private AI investments, positioning them third and fourth globally, respectively, according to Stanford University data. Analysts suggest that the influx of these investments is bolstering currency demand, particularly in the case of Sweden, whose krona has appreciated nearly 15% against the dollar this year. The British pound has also risen 7%, though its gains are more muted due to fiscal concerns.
Major tech companies such as Microsoft, Nvidia, Meta, Alphabet, and Brookfield are spearheading large-scale investments and data center developments in both countries. Britain recently secured a £31 billion ($42 billion) AI and tech-related pledge from U.S. firms. Analysts acknowledge that while the overall effect on economic growth remains unclear, these investments are contributing to increased resilience in both currencies.
The krona's performance is clearer compared to sterling, given Sweden's smaller and less liquid currency market. Investor sentiment is becoming more optimistic, particularly as AI raises hopes for productivity growth and better economic prospects in aging economies like the UK.