Allianz warns Europe faces AI 'dependency trap' on US and Asia

A new report from Allianz warns that Europe is falling into a technology 'dependency trap' as artificial intelligence reshapes global trade. The continent relies heavily on the United States for cloud computing (80% market share), enterprise software (59%), and customer management software (73%), while Asia supplies 57% of its IT hardware and over half of data centre gear, including GPUs for AI training. The US has tripled its AI-related imports since 2023, driven by data centre investments, while Europe's have risen just 40%, exposing a widening 'infrastructure gap'. The report notes American tech giants control up to 40% of Europe's operational computing capability and nearly half of upcoming data centre projects, leaving Europe vulnerable to a US 'kill switch' on cloud services.

Europe faces what Allianz calls a 'dual deficit' of insufficient private capital and fragmented public policy. Data centre projects in parts of Europe can take 4-5 years due to complex permitting, environmental regulations, and ageing power grids with limited capacity. Unlike the US, where private companies pour hundreds of billions into AI, or China, where state investment is streamlined, Europe struggles with regulatory fragmentation. However, the report notes Europe retains competitive advantages in industrial engineering, automated AI, and regulatory AI, citing sovereign computing projects in France and Sweden that aim to move public services off US platforms like Google and AWS.