ING sees stronger European position in AI race

Europe may be better placed to benefit from AI than its limited number of hyperscalers, global technology giants and venture capital firms suggests, according to ING. Marieke Blom, ING’s chief economist and global head of research, said the key issues are how much the region can gain from AI adoption and whether it can preserve enough technological sovereignty.

ING said AI could help address three structural challenges in Europe: labour shortages, a large base of small and medium-sized enterprises, and fragmentation between national markets. The technology could raise productivity, improve matching between employers and jobseekers, help smaller companies scale with less upfront investment, and reduce cross-border barriers linked to language, regulation and administration.

Costs may also prove less restrictive than feared as open-weight models challenge the pricing power of larger language models and require less computing capacity. ING highlighted European strengths in research talent, specialist AI models and technology centres including London, Paris, Berlin, Amsterdam, Stockholm and Zurich, alongside companies such as Mistral AI, Aleph Alpha and Bielik.

Europe still trails the United States in data centre capacity, but ING said capacity is expanding rapidly and could almost triple by 2035. The European Union is tendering seven AI giga factories, while ASML, NXP, Infineon and STMicroelectronics remain important to the global technology supply chain. ING also noted that Apple, IBM, Microsoft, Meta and Alphabet generate between a quarter and a third of their turnover from Europe, creating mutual dependency.