AI Boom: Is Europe Still in the Race – or Already Left Behind?

Europe in the digital race: Cooperation, AI application and the European way forward

In a world where artificial intelligence (AI) is driving the next great economic race, European countries face a crucial question: are we investing enough to remain globally competitive? The US and China are ready to pump billions into the technology. This was recently confirmed when the private sector in the US invested $100 billion. 500 billion has been earmarked for “Project Stargate”. At this point, we are not questioning whether the money is there.

If you compare the private sector investment in AI from 2013 to 2022 in the US alone (around $249 billion) with that in Germany (around $7 billion), it is the equivalent of the squad value of Manchester City and Hansa Rostock. This puts Germany in the third league – in football and in AI. The 500 million euros recently raised by German AI start-up Aleph Alpha doesn’t just seem paltry – it is paltry. The question arises: Which way should Europe go?

We are experiencing a future shock. AI is ubiquitous and the technology is fundamentally changing many aspects of our lives. But where does Europe stand when it comes to AI? Have we already lost out as a digital hub, or do we still have a chance to shape the world of the future?

Promoting cooperation as a European strength

In Europe, the market is highly fragmented, characterised by national laws and regulations – but also by national capital markets. But cooperation and funding opportunities are essential for a functioning digital single market that allows companies to operate and scale. Only together can Europe compete with the big tech players from the US, China and, in the future, the Middle East. One example is the “Digital Europe Programme”, which invests in AI and cybersecurity, creating an innovation network that pools resources and spreads risk. This creates an ecosystem that fosters innovation and accelerates the development of advanced technologies.

Facing constant change through AI innovation

Artificial intelligence challenges established standards, technologies and therefore itself in very short cycles. A clear example of this is the Chinese start-up Deepseek, which is challenging and surpassing models such as ChatGPT with its fundamentally innovative design. This shows that even supposedly leading technologies can be replaced by newer innovations at any time. The rapid evolution of the AI sector requires a constant willingness to adapt and refocus in order not to fall behind the international competition. In any case, the race for AI supremacy is far from over.

Driving practical AI applications

However, the key to success lies not only in the development of large-scale language models, but also in the practical application of AI. At the end of the day, it’s not about who developed the technology, but who knows how to use it most profitably. AI is based on basic technology and infrastructure. But the decisive factor will be: Who will succeed in positioning themselves for the long term through application innovation? The story is not yet written.

Europe’s AI strategy: Defining a European path

Europe has the opportunity to position itself between the current leaders, America and China. This path can be based on innovative applications, but above all on ethical standards, data protection and sustainable development. In short, an AI that people, states and businesses can trust. The European path should also include regulation that not only guarantees the security of citizens and businesses, but also creates a level playing field. We are at a crossroads. We can only realise the dream of being the world champion in AI applications if we are allowed to use AI in Europe. Even today, many AI technologies cannot be used in Europe because of regulatory barriers. This may make sense in some cases. But it can also permanently weaken Europe as an AI location and thus our economy.

We need to make two fundamental decisions quickly – both at the level of economic policy and in many companies: How do we use AI in an innovative and value-adding way as a competitive advantage, while at the same time following ethical principles that serve the overall well-being of our society? To do this, Europe must use its strengths in sustainable technology development to set new standards for environmentally and socially responsible technologies. And we should always be aware of the four characteristics that really determine sustainable competitive advantage. European AI applications must be valuable and hard to replace for customers, and rare and hard to imitate for competitors. This is true for all industries and technologies. Most importantly, the criteria show us how challenging these endeavours will be in the age of AI.

Shaping the Future of AI in Europe

When it comes to AI, Europe is on the threshold of a crucial phase in its economic development. Through greater cooperation, targeted investment in applicable AI and the promotion of a unique European model, Europe can not only compete globally but also play a leading role in the ethical and sustainable use of new technologies. It is time to embark on this journey.

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