insurance company<\/a> Allianz argues that the world\u2019s economy is reorganising around tech industries such as cloud computing, data centres and semiconductors, where Europe is weaker compared to the United States and Asia.<\/p>\nAsia dominates the export of AI-related goods with 65% of this part of the world economy and seven of the world\u2019s top 10 AI exporters, in an industry that has exploded from $1 trillion (\u20ac880bn) in 2014 to $3.8 trillion (\u20ac3.3tn) in 2025.<\/p>\n
The US has tripled its AI-related imports since 2023, largely due to the country\u2019s investments in data centres and cloud computing. It is also home to nearly half of the world\u2019s data centres.\u200b<\/p>\n
Europe\u2019s AI-related imports, meanwhile, have risen by just 40% over the same period, highlighting what Allianz describes as a widening \u201cinfrastructure gap\u201d.<\/p>\n
The bloc has a \u201cmodest\u201d role across the AI supply chain, which leaves the region with \u201climited strategic leverage and meaningful exposure to supply-chain disruptions\u201d, the report found.<\/p>\n
Dependent on an American \u2018kill switch\u2019<\/p>\n
American tech giants control up to 40% of Europe\u2019s operational computing capability and nearly half of upcoming data centre projects.<\/p>\n
These firms are profiting off a weak market for private investment in companies and low competition from local firms, the report said.<\/p>\n
The US also has a 80% market share of Europe\u2019s cloud computing market, 59% of Europe\u2019s enterprise software revenue and 73% market share of customer management software. That leaves non-US players \u201cto compete for the remaining margins\u201d. \u201cStructural constraints, fragmented regulation, complex permitting processes, grid connection delays, no domestic hyperscaler and limited VC or state-backed funding reinforce this dependency,\u201d the report said.<\/p>\n
Europe is also reliant on hardware outputs from Asia, such as the graphic processing units (GPUs) needed for training AI models. The bloc imports 57% of all its IT equipment and more than half of the hardware gear needed for its data centres from five Asian countries: Taiwan, China, South Korea, Malaysia and Vietnam.<\/p>\n
This reliance on Asian hardware \u201ccomplements\u201d the US dependence that will \u201cincrease\u201d if there is no independent investment in that area, the report found.<\/p>\n
\u201cUnder that backdrop, Europe is permanently under the threat of a US ‘kill switch’ on cloud data, meaning that the country can turn off these services whenever it wants,\u201d the report added. \u201cThis will create a widening EU-US service imbalance if AI-related markets are created abroad.\u201d<\/p>\n
Europe\u2019s \u2018dual deficit\u2019<\/p>\n
The continent suffers from what the report calls a \u201cdual deficit\u201d, of insufficient private capital and fragmented public policy, unlike the US, where private companies pour hundreds of billions into AI infrastructure, or China, where the state streamlines investment.<\/p>\n
Europe needs to clear its regulatory and capital constraints to \u201cavoid falling into a technology dependency trap\u201d, the report said.<\/p>\n
For example, the report notes that the combination of limited land options in the cities, complex permitting processes and environmental regulations make it difficult to build data centres. Some projects can take as long as four years to get off the ground.\u200b<\/p>\n
It can take up to five years for data centre projects in some parts of Europe because the providers are not able to connect to some ageing power grids that have limited capacity and are unable to deal with the intense power demands of a new centre, the report added.<\/p>\n
Despite those concerns, the report argues that Europe still has some competitive advantages in industrial engineering, automated and regulatory AI.<\/p>\n
It applauded initiatives like sovereign computing projects in France and Sweden, which are looking to take public services off US technology companies like Google or Amazon Web Services (AWS) and instead invest in European solutions.<\/p>\n
These initiatives are promising \u201ccounterweights\u201d, but still modest in scale, the report said.<\/p>\n","protected":false},"excerpt":{"rendered":"Europe risks falling into a technology \u201cdependency trap\u201d as artificial intelligence (AI) reshapes global trade and economic power,…\n","protected":false},"author":2,"featured_media":606328,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,733,4308,206657,86,426,56,54,55],"class_list":["post-606327","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-eu-usa","tag-technology","tag-trade","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/606327","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=606327"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/606327\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/606328"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=606327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=606327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=606327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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