In grim scenario, sluggish Europe risks being left behind by AI revolution

European leaders like talking about tech sovereignty but are reticent to walk the walk. If the EU doesn’t step up its efforts to invest in AI, it will be left behind as an economic backwater, a group of policy thinkers has warned in a new imaginative report. Critics see fearmongering.

The fictionalized near-future scenario named “Europe 2031: What getting AI wrong means for us” reads a little weird, but it certainly draws attention to the report’s main idea that Europe is not ambitious enough – and, of course, overregulating.

“The current trajectory of AI calls for the most ambitious political agenda in the history of post-war Europe. Unless we embark on it now, Europe will lose the ability to shape its own future,” the report warns.

“We will end up economically and politically sidelined, with values we cannot defend, social welfare systems we can no longer fund, risks we cannot address, and a Union that cannot hold.”

The need to invest in AI

Essentially, “Europe 2031” is a five-year scenario about Europe’s “impending slide into irrelevance.”

The narrative of this 18,000-word emotional warning centers on a fictional character working at the European Commission and struggling to convince her bosses to take AI more seriously.

Needless to say, she doesn’t, and Europe loses its power and riches – all in beautiful prose. The authors explain that this style was chosen to engage people on an emotional level and to wake Europe up.

Indeed, Europe’s AI buildout is way too small. Yes, the Commission just presented its tech sovereignty package, which includes a proposal to triple the EU’s data center capacity over the next 5-7 years at a cost of around €200 billion ($231 billion).

But the European plan is dwarfed by the more than $400 billion that US tech firms spent largely on expanding AI infrastructure in 2025 alone. In fact, American hyperscalers spent more than $200 billion on AI data centers in 2026 Q1 alone.

The report explains that 2025 was the crucial year. Europe allegedly misjudged how fast AI would move and how much it would change. The EU’s policymakers also misjudged their own ability to catch up.

At first, Europe saw the explosion of the cheap Chinese model DeepSeek and wrongly concluded that catching up is inexpensive and that “compute barely matters.”

The EU still held pompous AI summits but didn’t invest any real money in the industry, maybe also because Brussels saw OpenAI’s GPT-5, which underwhelmed, and, once again, wrongly felt the AI bubble was about to burst.

This is how the report takes us back to 2025: “Out of view, the opposite is happening: coding agents in Silicon Valley begin automating software engineering, and the leading labs start using their own models to build the next generation.”

Right now, Europe hosts just 5% of global AI compute, compared to the US’s 80%, and indeed has very little leverage to demand anything.

For good measure, most European civil servants were barred from frontier systems on data-protection grounds. As a result, those meant to regulate the mysterious technology often didn’t really understand it.

Only in 2026, after Anthropic released its Claude Mythos, did Europeans realize that their skepticism might have been ungrounded.

But the reality’s already merciless. Right now, Europe hosts just 5% of global AI compute, compared to the US’s 80%, and indeed has very little leverage to demand anything.

In the novella, Europe wakes up too late

Back to the scenario: it envisions a Mythos-level open-source model triggering a ransomware tsunami in 2027.

That’s when sovereignty policies backfire because European organizations have to run defenses “well behind the frontier.” What they do is pay ransoms all the time. The wave only eases when the US and China both ban open-source frontier models.

In 2028, AI stops reasoning in language humans can read, and Washington forces the Netherlands to cut semiconductor giant ASML’s exports to China. The EU, again, has no leverage to resist.

The hegemonic US then begins rationing frontier AI through a tiered, country-based system, and economic divergence accelerates. Most of Europe lands in Tier 2, and the continent’s GDP growth begins to diverge sharply from America’s.

By 2030, Europeans firms are outcompeted and its industries are bought up. Far away, the US and China are locked in an almost existential race, and the Americans use Europe’s industries as robot factories – naturally, unemployment rises.

“French debt spirals as welfare costs climb and the tax base erodes; southern Europe follows, the euro comes under sustained pressure, and the Union begins to fragment. Chinese credit lines appear across the continent, buying goodwill and trying to prise Europe away from Washington,” the fictionalized scenario reads.

Finally, in 2031, Washington moves to seize ASML, and Europe is left with three terrible options. It has to choose between becoming an American protectorate, handing the future to China, or withering away in isolation.

Solutions? Invest – massively – in compute and supply chains, build coalitions of aligned AI middle powers like Canada, Japan, or South Korea, and reform labor markets.

“Blatant fearmongering”

This is fiction, of course. And some critics are already pointing out it’s unrealistic, to say the least.

For instance, Michael Anti, a famous Chinese political blogger frequently censored by Beijing, wrote on X: “I feel that the summary of why Europe missed the AI wave isn’t direct enough. Europeans prefer regulation over embracing AI, period.”

Jon Evans, an engineer who previously worked as a “solutions architect” at Meta Superintelligence Labs, agrees.

“This is just bad science fiction, in the ‘posit a series of changes, project the future along one axis, and, fatally, assume all the other axes stay basically the same, and there are no relevant emergent properties’ kind of way,” he wrote.

One Redditor also raged: “This is some blatant fearmongering, promising our doom, if we don’t hand over our money and data to tech companies. It is written by VCs, Silicon Valley DeepMind researchers, and AI policy experts who have never worked on AI.”

”As expected from them, they dream up a world in which AI is the root cause and the solution to all our problems,” the user goes on and helpfully provides a reminder that “AI costs billions and is constantly losing money.”

And, of course, if the AI bubble is real and will burst, Europe, unlike the US, won’t plunge the world into a market crash and destroy the livelihoods of thousands of people.

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