\n The European Union has long aspired to be the global leader in \u201csafe AI,\u201d with a strategy that includes hefty fines. Yet, as mostly American AI executives recently committed to \u201cself-police<\/a>\u201d the world\u2019s leading AI models, it was patently clear that the EU\u2019s approach was not the one being followed.\n <\/p>\n \n Europe has long struggled to produce the tech giants boasted by Silicon Valley. The problem now extends to a lack of frontier AI models that can rival the likes of OpenAI\u2019s ChatGPT, Anthropic\u2019s Claude or comparable tools from China\u2019s DeepSeek.\n <\/p>\n \n European Central Bank president Christine Lagarde last month described the continent\u2019s AI predicament as \u201cawkward.\u201d\n <\/p>\n \n \u201cEither (Europe) holds back on adopting, because it cannot protect its data, and forgoes the growth \u2014 or it adopts AI quickly, becomes highly dependent, and risks losing the freedom to organize its economy according to its own values,\u201d she said in a speech<\/a>.\n <\/p>\n \n Paris-based Mistral AI unveiled<\/a> a model last week that it argues is on par with its better-known American competitors, providing a glimmer of hope for Europe\u2019s AI industry, but it remains to be seen if it will provide a serious rival to offerings from the AI giants.\n <\/p>\n \n Years before debates about how to police AI models became the topic du jour<\/a>, European lawmakers drafted the AI Act<\/a> to hold companies accountable for the risks arising from their tools, including strict requirements in areas for data quality, human oversight and cybersecurity.\n <\/p>\n \n Non-compliance can result in forced changes to tools or fines of up to 3% of annual turnover, or total income, which would amount to billion of dollars for the biggest tech companies.\n <\/p>\n \n The AI Act is \u201ca crucial piece to putting guardrails in place. And it puts Europe in the position to shape global efforts on how to tackle\u201d the dangers of the technology, European Commission President Ursula von der Leyen said in her state of the union<\/a> address last month.\n <\/p>\n \n But in practice, the law has proven difficult to enforce, with several EU member states yet to establish authorities to police compliance.\n <\/p>\n \n The law, alongside other tech regulations like the Digital Markets Act and the General Data Protection Regulation, has also contributed to delays in the rollout of AI products in Europe.\n <\/p>\n \n Meta AI, for example, arrived in Europe in March 2025, some 18 months after its US rollout began.\n <\/p>\n \n \u201cIt\u2019s taken longer than we would\u2019ve liked get our AI technology into the hands of people in Europe as we continue to navigate its complex regulatory system,\u201d Meta said<\/a> at the time.\n <\/p>\n \n Regulation holds back European companies, too. Roughly half of 157, 000 firms surveyed<\/a> last year by Eurostat, the EU statistics office, cited a lack of clarity about legal consequences and concerns about violating the bloc\u2019s stringent data protection laws as reasons not to adopt AI.\n <\/p>\n \n The AI Act and related national regulations are \u201cslowing us down,\u201d said El\u00e9onore Crespo, the co-founder of Pigment, a Paris-based firm valued at more than $1 billion that builds AI software for businesses.\n <\/p>\n \n Europe\u2019s economy needs \u201cinnovative companies\u201d to survive. \u201cIf regulation holds us back, it\u2019s not going to work,\u201d she told CNN.\n <\/p>\n \n The European Commission has itself tacitly acknowledged the regulatory burden. The AI Omnibus<\/a>, a package of legislation introduced last year, watered down some requirements of the AI Act and extended the timeline for the implementation rules relating to high-risk AI systems to December 2027.\n <\/p>\n \n Legal experts and AI researchers say it is too soon to judge whether the AI Act has been a success, partly because the rules are still being phased in. But doubts remain about whether the legislation can keep pace with AI\u2019s rapid-fire development.\n <\/p>\n \n \u201cThe prohibitions (of the act) are broadly sound and the transparency requirements are relatively straightforward,\u201d said Amir Banifatemi, the chief responsible AI officer at Cognizant AI lab, a research firm based in San Francisco. \u201cThe high-risk regime is the weak point, and it has not yet begun to apply,\u201d he told CNN.\n <\/p>\n \n Banifatemi pointed to AI agents as one potential problem. He said agents may combine tools from different providers, raising thorny problems over who\u2019s accountable if something goes wrong.\n <\/p>\n \n Regulation is far from the only barrier to greater AI uptake in Europe. A lack of investment in infrastructure and private companies may be an even bigger problem.\n <\/p>\n \n Private AI investment in Europe totaled roughly $21 billion last year, a fraction of the $285.9 billion invested in the United States, according to the Stanford Institute for Human-Centered Artificial Intelligenc<\/a>e.\n <\/p>\n![\"Anthropic](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/10\/gettyimages-2297781337.jpg\")
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<\/p>\n![\"Henna](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/10\/gettyimages-2249952692.jpg\")
<\/p>\n![\"El\u00e9onore](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/10\/gettyimages-2241960691.jpg\")
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