In recent times, there’s a growing sense that the process of digitalizing the economy and society belongs to the past. The present and future have long been driven by the development of artificial intelligence (AI). While Europe plans more than it executes, this cautious approach has hindered the takeoff of AI. In contrast, other regions act at the pace of innovations. In 2020, Europe acknowledged the need to create a cross-cutting instrument like the generous Next Generation EU funds to support the digitalization and sustainability of European economies and societies. However, nearly four years later, these initiatives are still being rolled out, largely due to excessive bureaucracy and the EU’s typically cautious approach to many issues. Meanwhile, many countries, led by the United States and China, have advanced to the next level — or even beyond — harnessing the immense, yet unimaginable potentials of AI. Once again, Europe may find itself falling behind.
The Nvidia phenomenon — one of the leading AI chip manufacturers — with an unprecedented surge in its stock price in recent months, is a prime example of how the market values the potentials being developed. The entire tech sector benefits from this momentum. Hardware producer Dell saw its stock multiply by 30 in a single day due to expectations of significant increases in sales of AI-related processes. Moreover, the three tech giants, Alphabet (Google’s parent company), Microsoft, and Amazon, have seen their combined market values increase by over $2.5 trillion during the AI boom. European tech companies also enjoy favorable investor sentiment. However, the scale of their operations and the limited beneficial interaction between businesses and product lines greatly restrict the scope of positive effects.
The strong momentum is evident in the numbers. According to the website “There is an AI for that,” there are already more than 12,000 apps utilizing some form of AI. In 2022, there were only around a thousand. Once again, the big American tech firms (Alphabet, Microsoft, and Amazon) are among the winners, gaining a competitive advantage by incorporating many apps and functionalities into their platforms. All these figures and activities indicate that the general digitalization process has given way to an AI frenzy in the United States, as well as in China. However, in Europe, the process, while underway, seems slower, partly due to the starting point from which they began, where there was already a smaller scale of developers and a regulatory and business environment less conducive to interaction and collaboration among startups.
Entrepreneurial dynamism, including mergers and acquisitions of startups, and the ability to attract top talent, greatly drive advancements in AI. In the American tech corporate sector, numerous acquisitions of startups allow the acquisition of technical capabilities and skills from these innovative companies. When talent is not acquired through these transactions, it can be attracted more granularly with better compensation packages and a business and technological development plan to attract the best human resources. Months have passed with talent poaching between competitors in AI, sometimes offering seemingly excessive compensations — where investor money abounds, sometimes they go overboard — only time will tell if they paid off.
Once again, Europe seems to lag far behind in terms of salaries in the tech sector. This will be a bottleneck for the development of AI — a true highway for creating added value — in the Old Continent, limiting the possibilities of productivity growth and, therefore, economic activity. This is especially true for countries like Spain, with comparatively low salaries — and productivity levels — and significant risks of talent flight, especially digital talent, which has been happening for some time, and therefore, with a great danger of lagging behind advanced countries in AI development.
The general cross-cutting digitization of the entire economy — citizens, companies, public administrations — is no longer sufficient for the AI of the future. Of course, an environment in which everyone is digitalized is better, but initiatives are needed to decisively push the potential of this tool. In the US, accustomed to almost exclusively private initiatives, this is already happening successfully. In China, AI has also exploded. Europe also needs private initiative and scalability, but, as is often the case in the Old Continent, the public sector must generate powerful incentives — including financial ones — to harness this enormous opportunity. Despite the different European institutional balances — with a more privacy-focused regulatory system — differentiation and significant added value can be achieved.
We are in a new era where AI has the potential to amplify our capabilities and enrich our lives like never before. Some countries, due to their better starting point (the United States), are advancing almost explosively. In Europe, that future will only be as bright as our ability to guide AI towards uses that reflect our common values and aspirations. At this inflection point, the invitation is open: actively participate in shaping a future where technology and humanity advance together, towards horizons yet unimaginable.