EU AI investments is just 4% of U.S. spending amid calls for action

The European Union has revealed a significant investment gap in artificial intelligence development, with its AI investments amounting to just 4% of U.S. spending levels.

Investment disparity overview: The EU’s artificial intelligence funding trails dramatically behind global competitors, with venture capital investments of $8 billion in 2023 compared to $68 billion in the U.S. and $15 billion in China.

• The EU allocated only €256 million to AI research through its European Innovation Council in 2024, while the U.S. invested $6 billion, including $4.1 billion from DARPA
• Leading European AI companies like Aleph Alpha and Mistral struggle to secure adequate funding within European markets
• The funding gap forces many European firms to seek investment opportunities outside the EU

Structural challenges: The European market faces significant obstacles in fostering technological innovation and maintaining competitiveness.

• No EU company created in the last 50 years has achieved a market capitalization exceeding €100 billion, while the U.S. has produced six companies valued over €1 trillion
• Between 2008 and 2021, 40 out of 147 European unicorns relocated abroad, primarily to the U.S.
• Excessive regulation and administrative barriers continue to drive technology companies away from Europe

Strategic initiatives: Former Italian Prime Minister Mario Draghi has proposed several measures to strengthen the EU’s technological capabilities.

• A recommendation to double the Horizon Europe R&D budget to €200 billion
• Plans to establish AI “factories” focused on model training
• Investment in semiconductor production to reduce dependency on imports
• Recognition of EU’s current strengths in autonomous robots (22% of global activity) and AI services (17% of global activity)

Looking ahead: While the EU acknowledges its current position as a technological underdog, the emerging nature of AI technology still presents opportunities for the bloc to establish leadership in specific sectors, provided it can address its structural challenges and investment gaps effectively.