Unlike the US, artificial intelligence (AI) may not be a panacea for China’s economy amid its deep property crisis, as the technology can further widen the country’s economic bifurcation, an economist said.

“AI isn’t boosting China’s economy as much [as it is in the US], and we also have to worry about some of the negative side effects,” said Lu Ting, chief China economist at Nomura, at a media briefing in Beijing on Thursday.

Currently, AI drives about half of the US economy, Lu said, and its capital markets have mostly been propelled by the boom in the technology.

US investment in AI has grown at roughly four times the pace of consumer spending, he added, showing that it had already made a massive impact on the world’s largest economy.

For China, the annual investment in AI roughly exceeds one trillion yuan (US$147.82 billion) per year – still much less than the scale of property investment during the 2010s. The share of AI investment in China’s overall economy is also much smaller, with the ratio only about one-third of that in the US, Lu said.

“The US has well-developed capital markets, so it’s easy for companies like OpenAI to raise money,” he said. “And even if we, in China, want to invest in, for example, buying chips in bulk, we don’t have the means – [other countries] simply won’t sell to us. We’ve hit a major bottleneck here.”