Lagarde Urges EU to End 27-Market Fragmentation for AI Race

3 articles · Updated · Euronews · Aug 19

Lagarde said Europe’s fragmented single market and capital markets are blocking AI scale-up, warning the EU cannot afford to miss a second digital revolution after falling behind in the first.
9% of total investment is what euro-area firms expect to allocate to AI this year, she said, but legal and funding barriers still push companies toward non-EU capital markets as they grow.
15% of the world’s researchers and nearly one-fifth of top-cited scientific papers are in the EU despite its 6% share of global population, underscoring the gap between research strength and commercial success.
Brussels is now negotiating the Savings and Investment Union and the EU Inc. company structure to ease cross-border funding and incorporation, though member states remain divided over capital-markets supervision.
Lagarde’s appeal echoes Mario Draghi’s 2024 competitiveness report, which cast AI as Europe’s last major chance to regain ground against the US and China in tech.