Former Google CEO Warns Europe Must Invest in AI or It Will “Become Dependent on China”
Eric Schmidt has issued a stark warning to European leaders regarding the future of artificial intelligence development on the continent. Speaking at the World Economic Forum in Davos on Tuesday, the former tech executive highlighted a dangerous trajectory for the European Union. He believes that without immediate and massive investment, the region risks losing its technological sovereignty. The core of his argument centers on the diverging strategies of the United States and China. Schmidt pointed out that Europe is currently falling into a gap between these two superpowers.
The United States is largely pursuing a closed-source model for its most advanced artificial intelligence systems. Companies like Google and OpenAI keep their proprietary codes private and sell access through licensing fees. This approach ensures high quality but creates a financial barrier for widespread adoption by foreign entities. Conversely, China is heavily investing in open-source and open-weight models that are freely available. Schmidt explained that this difference in distribution strategy poses a unique geopolitical threat to Europe.
If European nations do not fund their own alternatives, they will naturally drift toward the accessible Chinese options. The economic reality means that businesses will often choose the free or cheaper open-source tools over expensive American licenses. Schmidt cautioned that this would lead to a scenario where Europe runs its digital infrastructure on Chinese technology. He explicitly stated that this is likely not a good outcome for the region given the political differences. This dependence could undermine European values and data security standards over the long term.
A significant hurdle preventing Europe from catching up is the lack of physical infrastructure. Schmidt emphasized that training frontier AI models requires immense amounts of electricity and computing power. He noted that Europe struggles with high energy costs which makes running massive data centers prohibitively expensive. The continent needs to address these energy challenges to build a competitive environment for tech innovation. Without solving the power supply issue, software advancements will remain stalled.
There are some signs of life in the European tech sector such as the French company ‘Mistral AI’. This startup has achieved a multi-billion dollar valuation and represents a serious effort to build local capabilities. However, Schmidt remarked that these efforts are still small compared to the resources being deployed in Silicon Valley. The funding gap between European startups and their American or Chinese counterparts remains vast. He urged policymakers to prioritize funding for open-source laboratories to create a third option for the world.
The race for artificial intelligence dominance is moving faster than many regulators anticipated. Schmidt’s comments serve as a wake-up call that regulation alone cannot build an industry. Europe must transition from being a rule-maker to a builder if it wants to remain relevant. The choice is between spending billions now or ceding control of the future to foreign powers.
Share your opinion on whether Europe can realistically catch up to the US and China in the comments.
