AI Boom Propels Intangible Investment to Record High, Reshaping Global Economic Power

The Dawn of the Intangible Economy: A Global Shift

The global economy is undergoing a fundamental transformation, with investments in intangible assets reaching an unprecedented US$10 trillion in 2025. This landmark figure, detailed in the World Intangible Investment Highlights 2026 report co-published by the UN's World Intellectual Property Organisation (WIPO) and Luiss Business School, underscores a durable structural shift where value creation is increasingly tied to non-physical assets. The report, released on July 8, 2026, from Geneva, highlights the artificial intelligence (AI) boom as a primary catalyst for this acceleration.

Intangible investments, encompassing research and development (R&D), software, data, brands, design, and organizational know-how, have consistently outpaced tangible investments since 2008, growing at an annual real rate of 3.5 percent compared to 0.98 percent for physical assets. Between 2020 and 2025, this divergence became even more pronounced, with intangible assets growing by 5.5 percent annually against 3.2 percent for tangible ones. This resilience in the face of high interest rates, trade tensions, and economic slowdowns points to a new paradigm of economic stability and growth.

AI's Transformative Role and Investment Composition

The report explicitly identifies AI as a major driver of this transformation. While AI's initial impact includes physical investments in data centers, semiconductors, and energy infrastructure, its lasting influence primarily manifests through increased investments in software, data, R&D, and corporate reorganisation. Software and databases, in particular, recorded the highest aggregate real growth rate across all intangible asset categories between 2013 and 2023, at 7.3 percent annually. This signifies a strategic pivot towards the digital infrastructure and intellectual capital that underpin AI development and deployment.

The study, which analyzed 29 economies accounting for 57 percent of global GDP, reveals a clear hierarchy in this evolving landscape. The United States leads by a significant margin, with nearly US$5 trillion in intangible investments in 2025, approximately six times the level of second-placed Japan. Germany ranks third. In terms of intangible intensity relative to GDP, Sweden stands out at 17.4 percent, followed by the US at 15.6 percent and France at 15.2 percent. Meanwhile, India, Japan, and the Philippines recorded the fastest growth rates, indicating dynamic shifts in the global innovation ecosystem.

Geopolitical Implications: Power, Competition, and Policy

The findings carry profound geopolitical implications. The overwhelming dominance of the United States in intangible investment, particularly in software, data, and brands (exceeding US$566 billion in brand investment alone), reinforces its technological and economic hegemony in the nascent AI era. This leadership in critical digital infrastructure and intellectual property provides a significant strategic advantage, influencing global standards, innovation pathways, and future economic power balances.

The rapid growth observed in economies like India, Japan, and the Philippines suggests a broadening of the global innovation base, potentially fostering new centers of technological influence. Japan's strong showing, despite its mature economy, highlights its continued capacity for high-value innovation. India's accelerated growth, driven by its vast talent pool and digital transformation initiatives, positions it as a crucial player in the global AI and data economy.

A notable aspect of the WIPO study is the absence of China, the world's second-largest economy, from the covered nations. This omission, whether due to data availability, methodological differences, or geopolitical factors, creates a significant gap in the comprehensive global picture of intangible investment. Given China's aggressive pursuit of AI leadership and its substantial investments in digital infrastructure and R&D, its exclusion from this particular analysis underscores potential divergences in how major economic blocs measure and report such strategic assets, or perhaps reflects broader geopolitical tensions impacting data sharing and transparency.

This structural shift towards intangible assets also has direct implications for national security and strategic competition. Dominance in AI, data, and advanced software translates into superior capabilities in areas ranging from defense and intelligence to cybersecurity and critical infrastructure. Nations that effectively cultivate and protect their intangible assets will likely gain a significant edge in the geopolitical arena. Consequently, governments worldwide will face increasing pressure to adapt policies related to intellectual property rights, data governance, R&D funding, and education to foster growth in these critical sectors and safeguard their national interests in an increasingly intangible-driven global economy.

Source referenced: STRAITSTIMES

This brief was synthesized by our Editorial Engine and reviewed by The Ground Narrative team.