Europe’s AI Future: Focus on Application, Not Infrastructure

Europe does not require a surge of new data centres to compete in the AI sector, according to Christian Klein, CEO of one of the region’s largest companies, SAP SE, as reported by Bloomberg.

“Do we really need to build five data centres and fill them with powerful chips? Is this what Europe needs? I doubt it,” he said.

The expert explained that large language models, which require colossal computing resources and energy during training, are becoming a mass product.

“DeepSeek has proven this,” Klein noted.

Instead of creating data centres, European companies should focus on the practical application of AI to enhance their business efficiency.

Europe lags behind the US in AI infrastructure. In January, several American companies joined forces under the Stargate project to invest $500 billion in the sector. In response, the EU launched the InvestAI initiative, aimed at attracting €200 billion into artificial intelligence, including a new €20 billion fund for AI gigafactories.

In July, OpenAI agreed to lease about 4.5 GW of computing power in Oracle’s data centres as part of Stargate. This is a significant amount of energy, capable of powering millions of homes. 1 GW is comparable to the power of a nuclear reactor.

To meet the needs of the ChatGPT creator, Oracle, together with partners, will develop several data centres across the US.

Nvidia’s CEO Jensen Huang visited the EU in June and stated that the region is hindered by a lack of computing power. He announced a series of partnerships involving the deployment of thousands of the company’s chips.

In Klein’s view, attempting to catch up with the US is a waste of resources. Although in January at the World Economic Forum in Davos, the CEO of SAP SE described the Stargate project as “a great example for Europe” and expressed “absolute support” for a European version of the initiative.

Is Regulation a Problem for the EU?

On August 1, 2024, the EU enacted the Artificial Intelligence Act. Its main provisions will fully come into effect on August 2, 2026. Until then, they will be integrated at specific intervals:

• February 2, 2025 — a ban on AI systems posing unacceptable risks, such as tools for manipulating people, deceiving them, or classifying them by social rating;
• August 2, 2025 — provisions for regulating general-purpose artificial intelligence systems;
• August 2, 2026 — restrictive rules for “high-risk” AI systems, including biometric data, critical infrastructure, and education.

European companies, including ASML Holding NV, Airbus SE, and Mistral AI, urged the EU to suspend the initiative for two years, claiming it jeopardises the continent’s AI ambitions.

The letter was signed by representatives of over 45 organisations. Business leaders asked European Commission President Ursula von der Leyen to delay the application of rules limiting the most powerful models.

“This delay, combined with prioritising the quality of regulation over its speed, will send a strong signal to innovators and investors worldwide that Europe is truly committed to simplifying rules and enhancing its competitiveness,” the letter states.

Among other signatories: Mercedes-Benz Group AG, BNP Paribas, Deutsche Lufthansa, Publicis Groupe SA, Prosus NV, and Siemens Energy AG.

Firms complain that the European Commission has not provided key guidelines and standards, including a code of practice, which should contain instructions for advanced AI companies to comply with the new regulations.

The document was initiated by a group called the EU AI Champions Initiative, led by the American venture company General Catalyst, which actively invests in Europe.

SAP SE, along with another major European tech firm, Spotify Technology SA, are not among the signatories.

Back in June 2024, Apple postponed the launch of Apple Intelligence in the EU due to “regulatory uncertainty.”