ECB Chief: Europe Can’t Afford To Miss AI Revolution

European Central Bank chief Christine Lagarde said Wednesday that the continent could not afford to miss out on the artificial intelligence revolution as the continent’s growth model comes under increasing pressure.

The United States and China are seen leading the AI race, with their companies producing the most advanced large language models and rapidly building vast new data centers. “Europe largely missed out on the first digital revolution, as the commercial gains from the spread of information and communication technologies were captured disproportionately elsewhere,” Lagarde said at a World Economic Forum event in Geneva.“We cannot afford to repeat that experience with artificial intelligence, the second digital revolution,” she said. While European companies are investing heavily in AI, barriers in the eurozone are hindering them from scaling up their operations, she said.

The “fragmentation” of EU markets means firms are not competing enough across the whole eurozone and also struggled to raise funds, particular when compared to US peers, Lagarde said. “The result is fewer firms growing to global size and slower diffusion of new technologies across the economy.”