Europe Must Build Its Own AI or Risk Economic Dependence

European Central Bank President Christine Lagarde warned that Europe must develop its own Artificial Intelligence (AI) capabilities to avoid being cut off from the technology. Speaking at a recent event in Vienna, she stated that relying on foreign AI could be used as leverage by trade partners, potentially impacting negotiations on tariffs and digital taxes.

Lagarde noted that currently, most notable AI models are being developed outside of Europe, with the US producing 59 such models last year and China producing 35. France and the UK each produced one notable model. The US also hosts three-quarters of the world's AI computing capacity, while Europe accounts for just 5%.

The European Central Bank estimates that fast adoption of AI could lift productivity by up to 4% over a decade, which Lagarde called 'transformative' for public finances. However, she also emphasized the risks associated with becoming too dependent on foreign AI technology.