The European Union’s (EU) push to establish itself as a leader in cutting-edge technologies, particularly artificial intelligence (AI), is hampered by underinvestment, regulatory hurdles, and fragmented coordination. These challenges threaten to derail efforts to compete with global powerhouses like the United States (US) and China, according to the European Commission.

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Also Read: EU Selects Seven Sites for First AI Factories, Marking EUR 1.5 Billion Investment

EU Investments in AI

The EU reports that its investment in AI amounts to only 4 percent of what the US spends. “The lack of cutting-edge technology companies in the EU promises to become a thorn in the side of Ursula von der Leyen‘s future plan to boost the bloc’s competitiveness and avoid falling behind the muscle of the United States and China,” the EU said on Saturday.

“While the EU is turning the house upside down to become a technological power, it must face a harsh truth that it invests only 4 percent in artificial intelligence of what Washington allocates to this technology,” the statement continued.

Investment Gap

“The EU’s efforts in advanced technologies, such as AI and cloud computing, are far from matching those of the US,” the EU said.

In 2024, the EU allocated only EUR 256 million to AI research through its European Innovation Council, a stark contrast to the USD 6 billion spent by the US, including USD 4.1 billion from Defense Advanced Research Projects Agency (DARPA) and 2 billion dollars from other related agencies. Venture capital paints an equally grim picture: Europe’s USD 8 billion AI investment in 2023 pales compared to USD 68 billion in the US and USD 15 billion in China.

“The few companies that are creating generative AI models in Europe, such as Aleph Alpha and Mistral, need large investments to avoid losing the race to US firms. However, European markets do not meet this need, pushing European firms to look outside for funding,” the EU said.