The following is Part One in a two-part series on Europe and what is becoming a global AI arms race.

Europe, once caught in the middle of an epic arms race between two nuclear superpowers, now finds itself in the shadow of a race to master artificial intelligence, according to a German investor and AI expert, who adds that the stakes are just as high for Europe as they were during the Cold War, if not higher.

“AI is the most important technology of the 21st century with the power to influence elections and national security, as well as provide longer health, economic prosperity,” said Fabian Westerheide, founder and CEO of Asgard Venture Capital. “This is a global AI arms race and Europe, right now, has barely left the starting gate.”

Westerheide, whose firm recently co-authored a paper that ranked countries in their leadership within AI industry, said that currently Europe has talent and potential, but suffers from a lack of direction and motivation.

“Europe is irrelevant among leaders of artificial intelligence in the world right now,” Westerheide said. “First of all, Europe is fragmented and seems to have no ambition and there’s no coherent strategy.”

Lessons from the Leaders

Europe’s AI strategy — or lack, thereof — stands in contrast to the two growing global AI superpowers — China and the United States, both of which have ambitions to seize a global AI leadership position and continue to formulate and execute strategies to achieve those goals. Not so coincidentally, Westerheide said that the U.S. and China currently rank at the top of Asgard’s AI leadership list, followed, somewhat surprisingly by Israel, a small country with an existential drive to master new technologies, especially ones that relate to the defense industry.

Looking at these AI leaders, Westerheide sees some common traits, but notes that leadership in developing a strong AI industry does not necessarily fit a template.

Both the United States and China have big national defense budgets and strong research universities and institutions that facilitate investment in AI research and development. In the United States, billions of dollars in defense research projects and competitions — funded, for example, through DARPA — are eventually funneled into companies in the Silicon Valley and other American tech hubs. These companies, such as Apple, Google, Microsoft, etc., are among the biggest AI-driven firms in the world.

“In combination with top universities, like Stanford and MIT, founders of AI startups and executives at AI-driven companies have access to strong research, an abundance of capital, and plenty of data,” said Westerheide. “All are ingredients needed to have a strong AI ecosystem.”

The Chinese government also spends billions on AI companies directly, while financing funds that encourage local governments to invest in AI.

However, Westerheide also notes some differences between these two global AI leaders. The US is individualistic and allows companies to start, thrive and fail. The Chinese government favors centralized planning and is strategic in its investments.

A Divided Europe

Although Europe has talented, smart and entrepreneurial citizens to foster a health AI ecosystem, the situation in Europe is currently different from China and the U.S.

“Europe isn’t unified — every country is doing its own thing,” said Westerheide.

The United Kingdom, for example, offered about $648 million — about 500 million pounds — to invest in its AI companies and France will invest about $1.2 billion.

But, Europe has a lot of strengths. The region has world-class universities. Europe also currently boasts a hungry group of young, cutting-edge AI companies and likely contains many more on the verge of starting up.

Further, Sweden, Denmark and Norway also understand the opportunities of AI technologies and are pursuing ambitious national projects and understand, according to Westerheide. He adds that Switzerland would make a strong research partner.

Westerheide said the potential for greatness is already there.

“However, there is no European cooperation,” said Westerheide. “Projects like CLAIRE — Confederation of Laboratories for Artificial Intelligence Research in Europe — or JEDI — Joint European Disruption Initiative — struggle to get the political support to create a Pan-European, non-militaristic version of DARPA for Europe.”

Westerheide points out that the European Commission recently appointed a group of 52 experts to create a strategy, however, he already sees issues with the board. About 92 percent of the membership represents lobbying parties, research groups, or large corporations. Only 2 percent are from AI startups and investor communities.

Unlike the U.S. and China, Europe seems blind to how integral a vibrant, entrepreneurial startup community is to develop and sustain an AI ecosystem.

“That shows, that Europe only wants to preserve its wealth and status, but does not aim for a global leadership role,” said Westerheide. “Europe is running behind. It is losing the battle and does not even show the teeth to fight. Either European leadership has accepted its fate to be a vassal for US and/or China, or the leadership is totally ignorant of the new dynamics of the 21st century.”

Westerheide does believe that, although the situation is dire, it isn’t too late. The Asgard Singularity Fund, a brainchild of Westerheide that reinvents venture capital with cutting-edge blockchain technology to invest in Europe’s AI startups, is one example of how entrepreneurial ideas can help Europe take on the U.S. and China for AI leadership.

But there are more steps that will help.

In my upcoming post, we will review a 10-step plan Westerheide and other AI entrepreneurs in the region believe Europe must take to become a global leader in AI, the most powerful technology humankind has ever created.