Lagarde: Europe risks financing American AI without reaping benefit

“Hoje, European savers are again funding the disruptive technology of our time: artificial intelligence. Again, most of the money goes to the United States,” Lagarde said during a speech in Vienna, quoted by AFP.

The President of the ECB recalled that euro area households hold around EUR 440 billion in shares of US technological giants such as Microsoft, Alphabet (Google), Amazon, Meta or Nvidia.

According to the French central banker, the massive investments of these companies in artificial intelligence, partly financed by debt, are contributing to the high-pressure of long-term bond yields in the United States.

Lagarde stressed that European interest rates evolve to a large extent in line with US rates.

In the end, “Europe will bear part of the cost of this boom through its own financing costs,” he stressed.

According to Lagarde, “the question is whether it will also benefit from the growth that accompanies it”.

For the President of the ECB, the challenge is all the more important as artificial intelligence is one of the main hopes for relaunching European productivity, at a time when demographic ageing reduces the available workforce and Europe faces major investment needs.

In his opinion, Europe needs “sufficiently advanced” models that operate on European infrastructure. Therefore, the continent cannot “just buy” this technology abroad.

Last year, the United States produced 59 artificial intelligence models considered relevant, against 35 in China and only one in France and the United Kingdom, according to the Stanford AI Index report.

Lagarde quoted the French Mistral startup, which develops open AI models and has just captured three billion euros to expand, but has called for the development of more European models of artificial intelligence.

“If the European AI summarizes itself to Mistral, then we are screwed,” the French Minister for Economic Affairs Roland Lescure recently warned.