Europe facing unprecedented risk of being cut off from AI, Lagarde warns

FRANKFURT, Sept. 14 (Reuters) - Europe must become a producer of artificial intelligence technology, partly to preserve its own autonomy and achieve the efficiency gains needed to maintain its way of living, ECB President Christine Lagarde said on Monday.

European firms have been investing in AI but mostly importing the technology from overseas, especially the United States, leaving them vulnerable in case access is cut and potentially jeopardizing every sector.

"Within a few years (AI) will be screening goods at the border, deciding which tax returns are audited, dispatching trains, watching patients on wards and clearing payments at banks," Lagarde said in a speech in Vienna.

"A withdrawal of access, or a change in its terms, would then reach every sector at once," Lagarde said. "That is leverage of a kind no trade partner has ever held over Europe, and it could be used in any negotiation, on tariffs or on digital taxes, for example."

While the EU and the U.S. are key allies, trust has been shaken recently by a host of issues, such as tariffs, demands by the U.S. to take over Greenland and the withdrawal of U.S. troops from Europe over political disagreements.