Europe needs deeper markets to fund sovereign AI

Europe is again financing a transformative technology largely built elsewhere. Euro area households hold about €440 billion in US technology firms, while the United States leads in AI models and computing capacity. The risk is that Europe bears higher borrowing costs from the AI buildout without securing the productivity gains needed for growth, public finances and strategic investment.

AI adoption is already accelerating across the euro area. Firms will devote around 10% of total investment to AI in 2026, and the share of workers using AI on the job now exceeds 50%. Faster adoption could lift productivity by up to 4% over a decade, but reliance on foreign systems raises concerns over data, access and Europe’s ability to protect its economic choices.

The proposed response centers on more European computing capacity, open models running on European infrastructure and a stronger position in critical parts of the AI supply chain. Closing Europe’s data centre gap over the next decade could cost as much as €600 billion, while households save around €1.4 trillion a year. The core challenge is building markets that can channel those savings into European AI infrastructure and companies.