The EU faces numerous challenges in the global race for AI investment. Since 2015, the EU has seen less venture capital investment than the US and China, which are leaders in AI. It is estimated that the overall investment gap between the US and the EU in AI more than doubled between 2018 and 2020, with the EU lagging behind by over €10 billion. Against this backdrop, the EU has gradually taken steps to create a level playing field for AI within Europe. To this end, investments have been increased and regulations adapted. In 2018 and 2021, the Commission and the EU countries agreed on measures to develop a so-called AI ecosystem for excellence and trust. This should make the EU a global leader in cutting-edge, ethical and safe AI.

"Substantial and targeted investment in AI will have a decisive impact on economic growth in the EU in the coming years," said Mihails Kozlovs, the Member of the European Court of Auditors responsible for the audit. "In the race for AI, there is a risk that the winner takes all. To achieve the EU's ambitious goals, the European Commission and EU countries need to join forces more effectively, act faster and make better use of the EU's potential. Only then can this great technological revolution be successfully mastered."
The Commission's AI plans from 2018 and 2021 are comprehensive and largely in line with international best practices. However, more than five years after the first plan, the coordination and regulatory framework for EU investments in AI is still being worked on. The auditors criticized the coordination between the Commission and the Member States, which has only had a limited effect. This was due to the fact that the Commission lacked the necessary control instruments and information. The credibility of the EU plans had also been undermined by the fact that the Commission had not set up a suitable system to monitor the results achieved with AI investments. Furthermore, it was not clear what contribution EU countries were making to achieving the EU's overall investment goals, meaning that there was no EU-wide overview.

The EU's investment targets are not specific enough and are also outdated, as they have remained unchanged since 2018. This lack of ambition in investment targets is at odds with the goal of building a globally competitive AI ecosystem. While the Commission has generally succeeded in increasing spending on AI research projects funded from the EU budget, it has not been able to significantly increase private co-funding. The Commission must also do more to ensure that the results of EU-funded AI research projects are comprehensively marketed or used.
The Commission has taken measures to create the financial and infrastructural conditions for the development and dissemination of AI. However, the EU-funded infrastructure - such as test facilities, data rooms and a platform for 'AI on demand' - has only been implemented slowly. So far, AI plans have only led to modest capital support for innovative companies from the EU (for example in the form of equity funding). The latest EU measures to create a single market for data are still in the start-up phase, so they are not yet able to promote AI investments.

Background

AI encompasses emerging technologies in areas that are evolving rapidly, including robotics, big data and cloud computing, high performance computing, photonics and neuroscience. The USA has long been a pioneer in AI, while China aims to become a global leader by 2030. Both countries are relying heavily on private investment from large technology companies. The EU is aiming for public and private investment in AI of EUR 20 billion between 2018 and 2020. For the following ten years, EUR 20 billion per year was planned. The Commission intended to increase EU funding for AI to EUR 1.5 billion in the period 2018 to 2020 and to EUR 1 billion per year in the period 2021 to 2027. The proportion of companies in the EU using AI varies greatly from member state to member state. France and Germany have announced the largest public AI investments, while four countries still have no AI strategies. The EU has an ambitious target of 75% of companies using AI by 2030. In 2021, Europe and Central Asia accounted for only 4% of global AI patent applications.