European Commission President Ursula von der Leyen has urged Europe's businesses to make great strides in artificial intelligence to make up for Europe's loss of economic power.
Ms von der Leyen reinforced warnings issued by French Foreign Minister Jean-Noel Barrot, who said Europe risked being caricatured as a spectator of AI development, sending highly qualified workers abroad, while also paying a high cost for imported US or Chinese AI technology.
Cheap imported energy, open global trade, growing access to the Chinese market and American strategic protection have “all disappeared”, she said. AI is among the key challenges faced by Europe, along with competitivity, high taxation and the fragmentation of the European market.
AI start-up chief
“AI is an economic and technological battle, and it is one of the most powerful productivity levers that we have,” Ms von der Leyen said. “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.”
A German politician, Ms von der Leyen delivered her speech in French to thousands gathered at the annual meeting of the largest employers' federation in France, the Medef.
Last month, the commission – the European Union's legislative arm – launched a call for tenders backed by €10 billion ($11.65 billion) in public funding to build up to seven AI gigafactories in the hope of reducing its dependency on the US. Europe's largest AI centre is currently under construction in the German city of Heilbronn.
'Kill switch'
Between 70 and 80 per cent of Europeans use American AI models. The top-five US AI companies – Amazon, Microsoft, Google, Meta and Oracle – are expected to invest $450 billion in AI this year.
Mr Barrot, who said he uses AI “every day”, struck an upbeat tone, arguing that Europe trailing behind in the AI race is a reversible situation. He said the EU was setting up a single market for data, an ongoing effort.
“Gaining the upper hand in AI potentially means gaining the upper hand everywhere else,” Mr Barrot said. “Being entirely dependent on others exposes us to the risk of a 'kill switch' – the power held by those controlling the most powerful models, infrastructure, or critical components to arbitrarily restrict, or cut off our access in order to coerce or punish us.”
European capitals were particularly alarmed by the US administration abruptly ordering Anthropic AI to restrict foreign access to its most advanced models – a move widely known as the “kill switch”.
But deep structural differences remain between the European and US markets, including varying regulations between the 27 EU nations that block companies from rapidly scaling-up in the European market. Beyond their reach sits about €10 trillion in European savings, including a large part invested abroad, some in AI development in the US.
The European Commission had tabled proposals on the integration and supervision of European markets that could unlock €470 billion in additional investment, Ms von der Leyen said. EU nations may reach an agreement on it before the end of the year.
Also speaking at the Medef gathering, industry leaders said these issues had been identified years ago and urged European politicians to hurry to find solutions. “We could have had this debate three or four years ago,” said Laurent Solly, who heads an AI start-up in Paris. “The missing element in Europe is that, while all this is known, no decision [has been] taken.”
Beatrice Cossa-Dumurgier, Western Europe director at online bank Revolut, suggested setting up a European equivalent to France's Livret A, created in the 19th century to help the state after Napoleonic wars.
The placement, capped at €22,950 for individuals, is the most used in France. It is not taxed and used by the state to fund social housing. “We could allocate the proceeds to funding the AI ecosystem that we so desperately need,” Ms Cossa-Dumurgier said, to applause from the audience. “Let's move forward.”
