Europe bets on AI rescue plan to pull even with rivals

BRUSSELS (CN) — Europe is throwing another 1 billion euros ($1.1 billion) at artificial intelligence, the EU announced Wednesday as part of a massive 200-billion-euro push to catch up with the U.S. and China in the global AI arms race.

The European Union rolled out two new AI strategies Wednesday, hoping to catch up on technology that’s already reshaping everything — from Wall Street trading floors to hospital operating rooms. EU Commission President Ursula von der Leyen put it bluntly: “I want the future of AI to be made in Europe.”

It’s a tall order. The 1-billion-euro announcement represents the latest piece of Europe’s ambitious 200-billion-euro AI mobilization — 50 billion euros in public funding plus 150 billion they’re hoping to attract from private investors. That includes a 20-billion-euro fund for massive “AI gigafactories” and 10 billion already committed to smaller AI facilities that officials call “the largest public investment in AI in the world.”

Europe wants to beat competitors globally with an “AI-first policy” across government and industry, top EU official Henna Virkkunen told reporters at the European Parliament’s headquarters in Strasbourg, France.

The plan targets Europe’s remaining strengths — automakers like BMW and Volkswagen, health care giants, energy companies and industrial manufacturers. Officials promise AI-powered medical screening centers, smarter factory systems and autonomous driving technology. A separate chunk goes toward boosting computing power for researchers.

Europe isn’t just playing defense on civilian tech. Officials are quietly targeting military applications too, though they’re coy about specifics. The real focus is AI-powered drones and surveillance systems — “the most important defense equipment we’re using right now,” according to a senior EU official.

The research talent problem is trickier. Europe’s throwing 108 million euros at a program to pool computing power and lure back the AI scientists — hoping it will convince them to “choose Europe” over Stanford or Beijing.

Meanwhile, Brussels is scattering 15 AI computing centers across member countries, plus five massive facilities with over 100,000 processors each. But true to form, they’re spreading them from Austria to Slovenia — the same pattern as their supercomputer program: 7 billion euros spread across 36 countries have produced 13 computers that still can’t match what Silicon Valley builds in one location.

The ambitious goals face steep challenges. Much of the 200 billion euros depends on attracting private investors who have historically preferred Silicon Valley’s faster-moving ecosystem and China’s massive state funding over Europe’s bureaucratic processes.

Getting 27 countries with different priorities, languages and regulations to execute ambitious tech policy has historically proven challenging — a coordination nightmare that makes passing a U.S. infrastructure bill look simple. But supporters argue this consultation process produces more inclusive and democratic technology policies than top-down approaches elsewhere.

The continent implemented the world’s first major AI law in 2024: The EU AI Act. With a phased implementation through 2027, the law heavily regulates artificial intelligence by risk level — banning some uses like social credit scoring while requiring extensive compliance for “high-risk” AI in hiring, medical devices and law enforcement.

The approach has divided opinion.

In July, executives from more than 40 major European companies — including chipmaker ASML, aerospace giant Airbus and AI startup Mistral — called for a two-year pause on key parts of the AI Act. Tech companies warn that key compliance codes won’t be finalized until 2026, leaving them to implement rules that don’t yet exist, while facing potential fines up to 7% of annual revenue. They argue this regulatory limbo puts them at a disadvantage against Silicon Valley competitors who can deploy AI systems immediately.

Supporters argue that Europe’s “trustworthy AI” approach will build public confidence and prevent harmful uses.

Meanwhile, the U.S. continues to brain-drain Europe’s best AI talent with Silicon Valley salaries and fewer regulatory hoops to jump through.

Europe’s AI problem

The latest European statistics tell a sobering story. Just 13.5% of European businesses actually use AI, according to new EU data. While that’s up from 8% in 2023, it’s nowhere near the EU’s goal of 75% of companies using AI by 2030. By contrast, the U.S. Chamber of Commerce estimates nearly 60% of American small businesses already use AI.

The gap looks even starker against global trends. McKinsey’s latest survey found 78% of organizations worldwide now use AI in at least one business function, making Europe’s corporate adoption rate look particularly sluggish. While even global leaders admit they’re still figuring out how to capture real value from AI — only 1% describe their deployments as “mature” — Europe appears to be missing the early adoption wave entirely.

When pressed about Europe’s ability to compete with Silicon Valley giants, Virkkunen struck an optimistic tone.

“We have 7,000 startups who are developing and training AI,” she said, while acknowledging that European companies “have been lacking access to computing capacity.” But a reporter’s pointed question about whether Europe risks getting “gobbled up by Sam Altman” and Mark Zuckerberg — the same way foreign competitors dominated solar panels and electric cars — highlighted the skepticism surrounding Europe’s latest AI push.

Europe does have some advantages. The continent hosts four of the world’s top 10 supercomputers, up from just two six years ago. European companies lead in industrial automation and renewable energy, and the region’s universities still produce world-class researchers.

The contrast reflects fundamentally different approaches to technology governance. The U.S. model prioritizes rapid innovation and market-driven solutions, while Europe emphasizes democratic oversight and risk prevention.

Still, the stakes are enormous.

China now produces more AI research publications than the EU and U.S. combined, according to European Commission data. Since 2017, Chinese AI research has grown 39% annually compared to Europe’s 32%. If current trends continue, European publications will represent less than 60% of Chinese output within four years. While Europe leads in social sciences research, it lags in engineering and physics — the fields where AI has the biggest commercial impact.

European officials plan to announce new data sharing rules later this month to help companies access the high-quality information needed to train AI systems effectively. Whether Europe can turn bureaucratic coordination into Silicon Valley-style innovation remains an open question.

The bottom line: Brussels is finally placing its chips on the AI table. But with adoption rates this low and competitors this far ahead, Europe faces an uphill battle that money alone can’t solve.

Courthouse News correspondent Yuval Molina is based in Brussels, Belgium.