Ending European tech stagnation
While US tech giants dominate the current AI landscape, Europe's own champions are few and far between. The continent that led the industrial revolution now struggles to foster globally competitive tech behemoths -- not for a lack of talent or innovative spirit, but rather because a complex mix of fragmented markets, cautious investment climates, and a regulatory environment that inadvertently stifles innovation.
The result is growing dependence on external technologies and a diminished capacity to shape the digital future according to Europe's values and interests. This digital lag is as much a strategic vulnerability as it is an economic problem.
Europe's tech deficit should concern the US almost as much as European governments. After all, a technologically weakened Europe is a less capable partner in addressing global challenges, from economic competitiveness to security. The US also knows that it cannot hold back the tide of Chinese technology alone. And Europeans know that there is no alternative to US power. Each still needs the other.
As Europe and the US seek a new tech relationship, East Asian countries like Malaysia, powered by government investment and dynamic private sectors, are making enormous strides. The Middle East, too, is leveraging its resources to become a new hub for AI development and tech innovation.
This rise of new tech power centres is, in itself, a positive development, fostering global competition and innovation, but it underscores the need for Europe to reclaim its position. The greatest challenge, however, comes from China, which makes no secret of its ambitions to achieve global AI dominance by 2030.
China's "Digital Silk Road" initiative is already spreading the country's tech infrastructure and influence across Europe, Africa, and beyond. And this isn't just about market share; it's also about embedding technical standards, surveillance capabilities, and, ultimately, China's authoritarian model into countries' digital DNA. If the US and Europe fail to offer a compelling, democratic alternative, much of the world's digital infrastructure will be controlled by a strategic rival.
The solution is a clear-eyed strategy -- a transatlantic technology pact for the 21st century, with a 2030 horizon. This strategy must revolve around a positive AI agenda, one that goes beyond simply trying to regulate or contain risks. We need to articulate a vision for how AI can be a force for good -- advancing science, improving health care, addressing climate change, and creating new economic opportunities. Europe recognises this: the Draghi report of EU competitiveness, the Paris AI Action Summit, and the recent Nato summit in The Hague all show an awareness of the need for radical change.
This new pact should focus on fostering joint research and development in foundational AI models and critical enabling technologies. Existing mechanisms like the Joint European Disruptive Initiative, the Nato Innovation Fund, and the Defence Innovation Accelerator for the North Atlantic can serve as platforms for joint research and development in strategic dual-use technologies.
We must also emphasise interoperability, especially in defence-related technologies. The turn by countries on both sides of the Atlantic towards reindustrialisation provides a strategic opportunity to align efforts around interoperable digital and hardware systems, strengthen defence supply chains, and avoid duplication. Shared standards and joint development of critical capabilities such as cloud, AI models, cyber, and quantum will ensure transatlantic resilience in the face of future conflicts.
The turn by countries on both sides of the Atlantic towards reindustrialisation provides a strategic opportunity to align efforts around interoperable digital and hardware systems, strengthen defence supply chains, and avoid duplication. Shared standards and joint development of critical capabilities such as cloud, AI models, cyber, and quantum will ensure transatlantic resilience in the face of future conflicts.
This will require investing in the joint digital infrastructure of the future, from next-generation networks to secure data centres. AI and emerging AGI systems will place immense demands on energy, computing power, and storage. The US and Europe must ensure we have the physical and digital backbone to support our AI ambitions, coordinating around semiconductor and advanced compute supply chains. This is where public-private partnerships can play a crucial role, bringing together governments, industry, and academia. The security of critical infrastructure, including in strategic locations like Taiwan, must be a shared priority, as digital and geopolitical stability are inextricably linked.
An important goal of transatlantic cooperation must be to offer an alternative to China's digital expansionism, particularly in developing countries. This means providing competitive financing, open-source technologies, and training that aligns with democratic principles and promotes open, interoperable systems. Only by acting together can the US and Europe provide countries with a compelling alternative to China's surveillance-driven model.
Lastly, we must rejuvenate our democracies to make them fit for the technological age. The decisions we make -- or fail to make -- in the coming years will determine whether the US and Europe can lead the next wave of tech advancement, or whether we will be reacting to a world shaped by others. A Europe that is merely a consumer, rather than a creator, of critical technologies will be a Europe with a diminished voice and influence. ©2025 Project Syndicate
Ylli Bajraktari, a former chief of staff to the US National Security Adviser and a former executive director of the US National Security Commission on Artificial Intelligence, is CEO of the Special Competitive Studies Project. André Loesekrug-Pietri is Chairman and Scientific Director of the Joint European Disruptive Initiative, the European advanced research projects agency.
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