Dusted by US and China, Europe faces irrelevance in AI, expert warns

Despite accounting for nearly 15% of global GDP, the European Union (EU) only makes up just 5% of total AI compute capacity and 6% of AI venture funding. This shows “just how far behind Europe has fallen,” and the matter is becoming urgent, warns Richard Windsor, PhD.

Hostility towards AI and uncertainty mean that AI investments are bypassing Europe, and the region is “still fiddling,” according to Windsor, founder of Radio Free Mobile, an independent research provider covering the digital ecosystem.

“The EU is far behind the US and China when it comes to both roll-out and relevance in AI, and unfortunately, the EU’s well-intentioned AI Act has had precisely the opposite effect of that intended,” Windsor said in a commentary to Strand Consult, a consultancy and research firm.

Currently, the US’s hegemony commands 69% of the AI computing power that has been rolled out to date, and the US accounts for 81% of all venture investments in the field.

The 27-member block accounted for only 6% of the total venture investment made in AI in 2025, according to Dealroom.co data. The region has only 5% of total AI computing capacity, according to Epoch.ai.

The expert believes that regulation is one of the main reasons why the EU is struggling to keep a seat at the AI table. The AI Act was intended to establish a legal framework that focuses on safety, transparency, and risk management. Instead, it went overboard, scaring investors.

“The problem is not Europe’s ability or its willingness to use non-European technology but the fact that the regulatory environment is hostile to AI enterprises, with the message from the EU saying, ‘if you want to do AI, don’t do it here,’” Windsor said.

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Politicians recognized that they had gone too far, hurting the rollout of AI in Europe, and backed down. The EU has postponed the implementation of large parts of the AI Act, including the rules for “high risk” AI systems, which basically cover all of the LLMs.

“These are the rules that have really hampered the rollout of AI in Europe, as they place obligations upon the creators of the algorithms that they have no hope of ever being able to meet,” Windsor said.

“Until there is visibility on what the eventual outcome is, the region will continue to languish.”

While the EU is figuring out what to do with the legal framework, the AI industry is allotting trillions of dollars of future investments, and China is taking over open source.

If Europe wants to have a stake in the AI business, attract talent, and be part of the AI revolution, it needs to move very quickly, the expert warns.

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