Europe cannot miss AI revolution, Lagarde says

Europe cannot afford to miss the artificial intelligence revolution, European Central Bank President Christine Lagarde said Wednesday, warning that the continent’s growth model is under pressure.

Speaking at a World Economic Forum event in Geneva, Lagarde said Europe had largely missed the first digital revolution because commercial gains from information and communication technologies were captured disproportionately elsewhere.

“We cannot afford to repeat that experience with artificial intelligence, the second digital revolution,” she said.

Lagarde said European companies are investing in AI but face barriers that make it harder to grow. She cited fragmentation in European Union markets and difficulties raising funds, especially compared with US peers.

“The result is fewer firms growing to global size and slower diffusion of new technologies across the economy,” she said.

Lagarde said scale is important for Europe to compete in AI and other new technologies as its post-war growth model weakens. She said that model had long rested on a rules-based global order underpinned by US security guarantees, cheap energy and expanding global trade, and that all three are weakening.

She also cited strained US-Europe relations since US President Donald Trump returned to the White House, including tariffs on European Union imports and questions over long-standing US security commitments to the continent.