The Tony Blair Institute (TBI) recently released a comprehensive paper outlining necessary reforms for the European Union to strengthen its position in the rapidly evolving field of artificial intelligence. The analysis, timed alongside discussions of European digital sovereignty, avoids simplistic solutions like procurement quotas and instead focuses on systemic improvements in regulation, investment, and talent acquisition. This matters because the EU risks falling behind the US and China in AI dominance if it fails to act decisively.
The Core Problems Facing EU AI Development
The TBI report identifies several key structural weaknesses hindering AI growth within the EU. These include fragmented markets, overly complex regulations, chronic underinvestment in tech infrastructure, and some of the highest energy costs globally. The report astutely points out that true digital sovereignty isn’t about isolation, but about leveraging choice and influence in the global tech landscape. Attempting to build domestic alternatives for every technology is economically unrealistic and strategically unsound.
Solution 1: Regulatory Reform and Capital Access
The first step towards accelerating AI adoption is overhauling the EU’s regulatory framework. The TBI advocates for simplifying reporting requirements, harmonizing enforcement across member states via the Digital Omnibus, and fast-tracking initiatives like a Savings and Investment Union. These reforms are essential to reduce the cost of innovation and allow businesses to scale effectively. The paper also calls for a continent-wide stock exchange and modernization of labor markets — a critical step often overlooked in EU discussions.
Solution 2: Infrastructure and Energy Security
The EU must address its physical and digital infrastructure gaps. While existing initiatives like EU Gigafactories and EuroHPC JU are steps in the right direction, the report suggests accelerating private investment in AI infrastructure. Critically, it also calls for a coordinated European energy program, including expedited permitting for nuclear power and renewables, to ensure affordable and reliable energy supplies. Without secure energy access, all other AI initiatives will struggle to thrive.
Solution 3: Accelerating AI Adoption Through Incentives
To drive widespread AI adoption, the TBI proposes three key areas of focus: data accessibility, a streamlined regulatory environment, and reforming academia. The upcoming Data Union Strategy should unlock strategic datasets, while public procurement and compute-credit incentives can stimulate market demand. The report avoids direct mention of GDPR reform, but implies that such a move may be necessary for true AI acceleration. European universities are currently constrained by rigid structures, outdated incentives, and uncompetitive salaries, driving top talent abroad. To retain and attract researchers, universities must be granted greater autonomy, competitive pay, and flexible pathways between academia and industry.
Solution 4: Exporting the “European Digital Stack”
Finally, the EU needs a coordinated strategy to export its digital government stack globally. Initiatives like Global Gateway should be leveraged effectively, with regional tech hubs staffed by technologists and diplomats to promote European standards. The TBI suggests establishing an “European Investment Acceleration Mechanism” to help investors navigate regulatory hurdles. While Global Gateway has faced criticism, it remains the most viable mechanism for extending European tech influence worldwide. The current fragmented approach leaves companies to manage exports independently, while many diplomats lack the technical expertise to facilitate efficiently.
In conclusion, the TBI report provides a pragmatic blueprint for the EU to assert its leadership in the AI era. Implementing these reforms requires bold action, but the alternative – continued stagnation and dependence – is far more costly. The EU must act now to secure its future in a world increasingly shaped by artificial intelligence.
