Don't be a spectator: Europe embraces AI to make up for loss of economic power

European Commission President Ursula von der Leyen has urged European businesses to make significant advancements in artificial intelligence (AI) to compensate for Europe's diminishing economic influence. French Foreign Minister Jean-Noel Barrot warned that Europe risks being perceived as an observer of AI development, losing top talent to foreign countries, and incurring high costs for imported US or Chinese AI technology.

Von der Leyen emphasized that AI is among the key challenges facing Europe, alongside competitiveness, high taxation, and the fragmentation of the European market.

Von der Leyen stated, "We could have had this debate three or four years ago. Our businesses are already adopting AI at a similar pace to their American competitors. We now need to scale up. Europe has the industry, it has the researchers, it has the data. Now it must turn them into an economic advantage." The German politician delivered her speech in French to thousands attending the annual meeting of the largest employers' federation in France, Medef.

Last month, the European Commission launched a €10 billion ($11.65 billion) public funding call for tenders to build up to seven AI gigafactories, aiming to reduce Europe's dependency on US technology. Currently, about 70 to 80 percent of Europeans rely on American AI models, while the top-five US AI companies are expected to invest $450 billion in AI this year.

The European Commission's top priority is to gain an upper hand in AI, which could potentially give Europe a competitive edge in other areas as well. However, deep structural differences between the European and US markets, including varying regulations, are hindering rapid scaling-up in Europe. EU nations may reach an agreement on integration and supervision of European markets that could unlock €470 billion in additional investment before the year's end. Industry leaders called for swift action from European politicians to overcome these challenges.