The AI Paradox: How many EU billions will be lost in the AI Act bureaucracy?
The hundreds of billions of euros needed for the EU to jump out of the shadow of the USA and China in the AI age may not be such an illusion after all. At the AI Action Summit in Paris, attended by almost all the important players in politics and the AI economy, this week was a fireworks display of major investments. Announcements were made every half day: 100, 150, then 200 billion euros.
An overview:
- €109 billion for AI in France:
The no longer stable French President Emanuel Macron announced, among other things, that the Canadian investment firm Brookfield intends to invest 20 billion euros in projects in the field of artificial intelligence (AI) in France in the next few years, the United Arab Emirates 50 billion euros - €150 billion for AI investments by major investors:
More than 20 international major capital providers have earmarked 150 billion euros for AI-related opportunities in Europe over the next five years, including big names such as Balderton, Blackstone, CVC, DST Global, EQT, General Catalyst, Insight, KKR, Lightspeed, and Warburg Pincus - €200 billion for AI Gigafactories:
EU Commission President Ursula von der Leyen presented her “InvestAI” initiative to mobilize 200 billion euros for investments in AI. Under this program, a new European fund worth 20 billion euros will be set up specifically for the AI Gigafactories, with much more money to come from the private sector. The goal is to build 4 AI Gigafactories in the EU, each with 100,000 AI chips, in order to be able to build our own large European LLMs
Now you could add up these sums and arrive at almost €460 billion that are planned to be invested in AI in Europe. This puts Europe almost on par with the USA’s big plans to invest 500 billion dollars in AI infrastructure with “Stargate”. In the end, however, it will probably be the case that these three pots will overlap – for example, when KKR invests in an AI Gigafactory in France.
But at least: Europe, still one of the richest regions in the world, is finally ready to invest in a central technology on a large scale. AI startups founded/launched in Europe have nothing to hide, for example
- Mistral AI
- Helsing
- Black Forest Labs
- Eleven Labs
- NXAI
- Magic
- Synthesia
- Liquid AI
and a few more that can definitely keep up with international competition. What the hundreds of billions of euros, if they are actually invested, can prevent in the future is that Magic, Eleven Labs, Liquid AI, and Co. do not have to migrate to the USA.
A bizarre situation
That’s one thing. The other is that if the EU really invests so massively in AI companies, LLMs, data centers, etc. over the next five years, we will find ourselves in the bizarre situation of the EU shooting itself in the foot. Because anyone who builds large, competitive AI models in AI gigafactories with 100,000 GPUs (for the insiders: calculated at more than 10^25 FLOPs) is, according to the AI Act, building systems with a “high systemic risk“.
This means that a good portion of the hundreds of billions of euros that are actually intended to keep up with the big players in the USA, China, and elsewhere will be sunk straight back into complying with the self-imposed regulations. The AI billions will therefore not only finance infrastructure, research, companies, and the like, but ultimately authorities, lawyers, consultants, and the entire bureaucracy that we actually want to get rid of.
That is the fundamental mistake that the EU made. They made the laws first and only then started to finance them on a large scale – costing themselves billions. This makes it all the clearer: the AI Act must be watered down.
