Europe has much to gain from artificial intelligence, but it is entering the AI era from well behind the United States and China. That is the message of remarks by Philip R. Lane, Member of the Executive Board of the European Central Bank, at The International AI Summit in Dublin on October 13, 2026, published by the ECB.
Lane describes AI as a general-purpose technology whose benefits depend on many actors: model developers, infrastructure builders, energy operators, the financial system, educators, and the managers and workers who must redesign how firms operate. Bottlenecks in any one of these areas can slow overall adoption (ECB).
AI is already shaping the euro area economy. Firms are set to devote around 10% of their total investment to AI this year, and AI-related lending accounts for roughly a quarter of recent credit growth to firms. In ECB surveys, 64% of firms report using AI experimentally or moderately, but only 7% report significant use. The share of workers using AI at work has doubled in two years, from 26% in 2024 to 52%. Lane says it is still too early to see a material effect on aggregate productivity, but hiring plans are muted, especially for new graduates (ECB).
The central point is the scale gap. Over the past two years, US digital investment has grown twice as fast as in the euro area, and US workers spend two to three times as much of their working week using AI. Citing the Stanford AI Index, Lane notes that the United States and China produced 59 and 35 notable AI models respectively, while France and the United Kingdom produced one each. The United States hosts 75% of global AI computing capacity; Europe hosts 5%. Lane warns that “asymmetrical AI capacity across countries may generate a host of economic and geopolitical issues” (ECB).
The gap also has financial consequences. Lane argues that the global AI investment boom is plausibly pushing up long-term interest rates. Because Europe’s AI boom is smaller, those higher rates amount to a material tightening of financial conditions in the euro area. High AI equity valuations and surging AI-related debt also pose financial-stability risks if expectations reverse (ECB).
The significance for European security is direct. Compute, frontier models and the industrial base behind them are becoming foundations of military power, from intelligence analysis to autonomous systems and decision support. A Europe that hosts 5% of global compute and produces a handful of frontier models will depend on others for capabilities central to its defense, at a time when it is trying to build strategic autonomy and a stronger European pillar in NATO.
The challenge is that Europe pays some of the costs of the AI boom, through higher interest rates and financial risk, without capturing a matching share of the gains. Closing that gap is now as much a strategic question as an economic one.
Source: Philip R. Lane, “The AI opportunity for Europe,” dinner remarks at The International AI Summit, Dublin, European Central Bank, October 13, 2026.