The AI Arms Race: Is Europe Catching Up?
- Chris Howell
- Feb 10
- 3 min read
The US and China Lead the Way
The AI arms race is heating up. The US is home to some of the biggest companies in the world (by market cap), and most of them are tech giants that have invested billions of dollars into AI. OpenAI, Microsoft, Google, Amazon, and Nvidia are some of the major players leading AI innovation from the States.
Meanwhile, China has become a formidable competitor. Liang Wenfeng, a Chinese entrepreneur, created Deepseek, an AI company that has trained models at a fraction of the cost of its American counterparts. Despite US attempts to limit China's AI advancements, China has solidified itself as a key player in the AI landscape.
The EU and UK: Catching Up?
For years, the EU and the UK have lagged behind the US and China in AI development. However, there are now signs that both regions are making significant strides to bridge the gap.
The UK’s AI Push
The UK Government recently announced its AI Opportunities Action Plan, a roadmap aimed at driving economic growth, enhancing productivity, and improving societal outcomes. If successful, this initiative could significantly bolster the UK's AI sector. However, concerns remain—such as the country's potential water shortages—that could hinder the rollout of data centres and the necessary power infrastructure.
That said, the UK certainly has the talent. DeepMind Technologies, a London-based AI company, was acquired by Google for approximately £400 million, proving the strength of the UK's AI ecosystem.
The EU’s AI Momentum
Across the Channel, European AI is also picking up pace. The French AI firm Mistral, founded in April 2023 by researchers Arthur Mensch, Guillaume Lample, and Timothée Lacroix, has quickly gained traction. Since its inception, Mistral has released its own large language models (LLMs) and recently upgraded Le Chat, its AI-powered chatbot.
Mercia AI put Europe’s answer to ChatGPT to the test, and the results were impressive. It accurately reported the latest European AI developments, knew that Liverpool were knocked out of the FA Cup by Plymouth, and even identified the ports on a monitor from an image.
Earlier this month, Le Chat Pro was launched, offering users access to a superior model, unlimited messages, and additional benefits. Meanwhile, France announced a €109 million investment into its AI sector. Unlike the UK, France already possesses the necessary power capacity for expanding data centres, thanks to its robust network of nuclear power plants.
The AI Action Summit and the EU AI Champions Initiative
The AI Action Summit, a two-day event in Paris, aims to position Europe as a global AI leader. A key outcome of the summit is the EU AI Champions Initiative, spearheaded by General Catalyst, a global investment and transformation company.
This initiative is urging European policymakers and industry leaders to take decisive action in AI development.
According to General Catalyst’s report, An Ambitious Agenda for European AI, the EU must:
Simplify AI Regulations – While the EU’s AI Act sets a global benchmark for AI safety, the initiative calls for a more streamlined, pro-business regulatory framework to foster innovation.
Invest in AI Infrastructure – Recognizing the substantial computing power and energy demands of AI, Europe must invest in cloud infrastructure, semiconductor manufacturing, and energy-efficient AI data centres.
Mobilize Capital – The EU AI Champions Initiative includes over 70 organizations (including Mistral) and aims to invest €120 billion into AI-related opportunities over the next five years.
The Road Ahead
Europe still has a long way to go before it can compete on equal footing with the US and China in AI, but the ambition, talent, and investment are clearly there. Deploying AI infrastructure across the EU and UK will take time, but Europe’s intent to emerge as a global AI leader should not be underestimated.
And Mercia AI will be watching—with great interest.
