Why Europe could be the real winner of the AI boom
QQQ•Europe may be less exposed to a potential AI investment bust because the debt and vendor-financing behind the boom are mostly American. If AI adoption drives the gains, Europe could also benefit: six European countries ranked among the top 10 for AI use, while the United States ranked 21st.
1. Less exposed to a bust
The AI infrastructure boom is financed largely through U.S. markets and contracts between U.S. companies, while European exposure is described as negligible. About a tenth of the $11.1 billion SoftBank raised in a high-yield bond issue to fund its OpenAI investment was denominated in euros. The column argues Europe would likely suffer less than the United States if the boom collapsed.
2. Europe’s potential advantage
The article says cheaper open-source models could challenge the economics of selling access to proprietary AI models. It cites AT&T’s shift of 40% of its AI use to open-source models, with 80% cost savings, and says eight of the 10 most-used AI models in September were open-source. It argues that European companies may have an opportunity in AI applications, even though the continent lagged in developing earlier technology giants.
3. Adoption matters
The article argues that users, rather than the companies or countries that invent technologies, capture most of their economic value. It cites a study estimating users receive nearly 98% of the gains from technological revolutions. A Microsoft report ranked the United States 21st in AI diffusion, while European countries accounted for six of the top 10.
