Stay informed with free updates
Simply sign up to the Artificial intelligence myFT Digest — delivered directly to your inbox.
Multinational companies are starting to use countries’ “AI openness” to decide where to invest, threatening to put much of continental Europe at a disadvantage to the US.
Executives from companies across the financial services, industrial and tech sectors said they were analysing countries’ AI talent, infrastructure and regulatory environment when deciding where to expand their operations.
“Companies have choices about where they locate their next R&D programmes, manufacturing capacity and operational investments,” said Maria Cristina Bifulco, chief strategy officer of Italian cable giant Prysmian.
“If Europe does not create the right conditions, those investments risk moving to markets that combine AI-friendly policies with greater regulatory certainty, long-term security of demand and a clearer understanding of the strategic value of local production,” she said.
One big US bank said it used a traffic-light system to rank countries on criteria including whether their government had made AI use a priority and whether data protection rules allowed them to use company and client information for AI applications.
“We are less inclined to add headcount in countries we consider red for AI adoption,” said an executive from the bank. “There are certain countries in mainland Europe that fall into that category; we consider the UK greenish,” they added.
The EU is trying to strike an increasingly difficult balance between boosting AI adoption while reducing its dependence on the US tech giants behind the technology. It was also the first large jurisdiction to impose legal guardrails on AI through its AI Act.
“On paper, the EU has gone further than any other major economy in regulating AI,” said Laura Houston, co-head of the tech practice at law firm Slaughter and May. “For a business deciding whether to build in Europe, the US or Asia, the cost and complexity of the EU model is naturally a key part of the equation.”
In contrast, the UK has taken a lighter touch to AI regulation, despite strong campaigning from the creative industries for tougher copyright protections.
Novo, the Danish maker of weight-loss drugs, chose London for its new AI co-innovation hub when it unveiled a partnership with Amazon Web Services last month to help with drug discovery.
“We go where the AI talent is and where we can operate responsibly,” said Anja Leth Zimmer, chief AI officer at Novo.
The EU also continues to struggle with difficulties in quickly building and deploying data centres, high energy prices, slower customer take-up of AI and smaller amounts of funding in comparison with the AI investments made in the US, said Zach Meyers of the Centre on Regulation in Europe think-tank.
A European Commission spokesperson said that Europe had “world-class industries with the highest-quality data to power industrial AI models” and that its AI gigafactories project would expand the bloc’s computing capacity.
The chief executive of Schneider Electric’s industrial software unit Aveva, Caspar Herzberg, said the company was still “evaluating the right AI criteria to include in investment decisions”. But Aveva planned to consider “AI maturity” when making investments, including countries’ AI readiness, openness and capabilities, he added.
Talent, computing power, the energy grid and frontier AI research were all part of the equation, Herzberg said. “This is an issue we see impacting investment planning going forward.”
Additional reporting by Tim Bradshaw