European Commission eyes ramping up AI to keep up with US and China 

The European Commission has identified 10 sectors that must increase their adoption of artificial intelligence to keep pace with other regions, announcing plans to mobilise €1 billion in existing EU funds to support AI integration across healthcare, manufacturing and defence.

With its Apply AI Strategy, the Commission aims to encourage an “AI first policy” for those sectors, so more companies will consider AI tools when tackling problems. 

European Commissioner for Technological Sovereignty, Security and Democracy Henna Virkkunen said in a press conference Wednesday that companies "should favour EU solutions where they can.”

“The businesses mainly use AI tools in their office work – and we now want to go to the industrial sectors and apply it," she added.

Concrete measures include setting up AI-powered, advanced screening healthcare centres to enable more accurate diagnoses, as well as supporting the development of AI tools tailored to sectors such as manufacturing, the environment and pharmaceuticals.

The €1 billion quota will be drawn from existing EU funding programmes such as Horizon Europe and the Digital Europe Programme, all part of the EU’s long-term budget. 

“The initiative will address ecosystem bottlenecks and downstream demand by Europe’s industry, enhancing both competitiveness and sovereignty in frontier AI development,” the statement said. 

The EU previously set a target for three-quarters of firms in the bloc to be using AI by 2030. 

However, data published by the Commission earlier this year suggests that the 27-member union is behind when it comes to AI innovation and investment compared to other major players in the field, including the US and China.

Whereas the EU’s primary funding tool for advanced technologies, including AI, had some €256 million in 2024, the US allocated more than $6 billion (€5.16bn) for the same purpose, data shows. 

The EU invested close to €7 billion in venture capital for artificial intelligence, compared to €58.5 billion in the US and €12.9 billion in China, according to the report.

AI Act to be paused? Commission says no

The call comes as the Commission plans to publish, before the end of this year, a package of measures aimed at making companies’ lives easier and helping them reduce obligations such as excessive reporting. It will review all existing legislation to identify what can be removed.

The AI Act — EU rules adopted in 2024 that rank AI tools depending on the risk they pose to society — will be part of this. The AI Act is being phased in gradually and will be fully in force in 2027. 

There have been calls, including last month by Italian Prime Minister Mario Draghi — whose report was the basis for many of this Commission’s plans on competitiveness — to pause the AI Act due “to unknown risks”.

His comments add to ongoing concerns from businesses for a “two-year clock-stop” on the rules to allow “both for reasonable implementation by companies, and for further simplification of the new rules.” The Commission in response said it is not considering such a pause.

Wednesday’s sectoral strategy comes after the EU executive in July published its overarching AI action plan which aims to improve infrastructure, data access, cloud and skills.

Under that plan, so-called gigafactories will be set up, where developers of AI systems, often start-ups, can train their AI models.

This applies to companies like the French MistralAI, which warned Europe last year that it lacks the data centres to train AI models that match the current demand.

The sectors encompassed in the strategy revealed on Wednesday include healthcare, pharmaceuticals, energy, mobility, manufacturing, construction, agri-food, defence, communications and culture, with others such as finance, tourism, and e-commerce possibly added at a later stage.