Back to the future: How the EU can upgrade its AI Continent Action Plan

Problem

“The AI race is far from over” proclaimed European Commission president Ursula von der Leyen at the Paris AI summit, “and global leadership is still up for grabs.” Now the commission has placed its bid to be an AI leader with the launch of the AI Continent Action Plan.

While the plan is a welcome step for the EU to promote its AI expertise at a global level, it does not effectively address Europe’s bottlenecks in AI resources, compute and energy. To match its aspirations for AI leadership, the EU will need to develop an approach that feeds into its existing strengths—and breaks down artificial silos.

Solution

1. Promote open-source AI leadership  

The AI Continent Action Plan should prioritise and accelerate the development of open-source AI models and frameworks that feed into Europe’s existing strengths. Better accessibility of open-source AI would lower the barrier to market entry for Europe’s low-resource actors and enable greater AI diffusion through customisation. Without open-source software, businesses would need to spend 3.5 times more on software.

Simultaneously, open-source AI could enable independence for companies and mitigate the risk that the market concentrates with a few corporate gatekeepers. To achieve this, the plan should dedicate a substantial portion of its AI factories and gigafactories capacity to train open-source AI models and provide free hosting services.

2. Remove barriers for AI data centres buildout

The plan commits to triple data-centre capacity in Europe by 2035, through a “Cloud and AI Development Act”—but there are already significant challenges to accommodate growing demand. In Dublin, for example, authorities have halted data-centre buildouts until 2028; Europe needs to address bottlenecks swiftly if it is to realise its objectives.

In the short-term, the plan must establish special AI zones in European regions which would benefit from accelerated permit for buildouts and which have a high potential for renewable energy generation. In the long-term, the EU should consider the role of Small Modular Reactors as a complementary clean-energy source and create an EU AI energy council comprised of national authorities, civil society and experts.

3. Secure unhindered supply of AI chips  

Amid President Donald Trump’s tariff turmoil, Europe’s dependency on the US for the supply of AI chips is worrisome for its AI infrastructure plans. The majority of EU member states already face restrictions on the amount of AI chips they can import from US-based providers. This gives Trump another bargaining tool—he could further lower these thresholds.

To ensure certainty for investors and avoid coercion, the EU will need to secure unhindered supplies of cutting-edge AI chips by investing in fabrication facilities and launching a Chips Act 2.0 to commit subsidies to AI chips manufacturing. The EU could also secure future supplies through bargaining—it can use its unrivalled leadership in lithography technology to leverage an uninterrupted supply of AI chips, in return for continued export restrictions of such technology to China. As an intermediate measure, Europeans must also protect their lithography technologies from ongoing attempts at industrial espionage.

Context

In most metrics of AI development, the EU falls behind the US and China. This means that Europe might end up losing on the strategic benefits that the technology promises to offer. Von der Leyen has signalled the EU’s commitment to catch up by launching a €50bn investAI scheme and an €8bn AI Factories initiative.

Now the AI Continent Action Plan aims to boost Europe’s AI innovation capability by implementing measures across five key domains: infrastructure, data, skills, algorithms and simplification.