EU’s AI Adoption Trails China Due to Regulations

Google’s President of Global Affairs, Kent Walker, recently addressed the EU, urging a more strategic regulatory approach to artificial intelligence (AI) adoption to better compete on the global stage, particularly against China. Walker’s comments come at a critical juncture as Europe seeks to balance innovation with responsible AI governance.

Speaking at the Competitive Europe Summit in Brussels, Walker framed AI as a revolutionary technology, akin to an “invention of a method of invention,” with the potential to fundamentally reshape modern life and determine future geopolitical leadership. He emphasized that the stakes are exceptionally high for the continent’s future prosperity and security, highlighting the urgent need for a revised strategy.

While acknowledging European Commission President Ursula von der Leyen’s commitment to prioritizing AI development, Walker expressed concern over the EU’s lagging adoption rates compared to other global players, most notably China. He pointed to China’s significant government investment in AI and its widespread integration across its economy as a key driver of its rapid progress.

“The strategy is paying off,” Walker stated, citing estimates that indicate up to 83% of Chinese companies are already leveraging generative AI. In contrast, the European Commission estimates that European adoption hovers around a comparatively low 14%. This disparity signals a potential erosion of Europe’s competitive edge in the long term.

Walker argued that this AI adoption gap is further compounded by a complex and burdensome regulatory environment. Since 2019, the EU has introduced over a hundred new regulations targeting the digital economy. This has resulted in a business climate where “more than 60% of Europe’s businesses now say regulation is their biggest obstacle to investment in the EU,” according to Walker.

This sentiment aligns with a recent Danish government study which projected that new regulations could impose an additional €124 billion in annual costs on businesses and public administration across Europe. Walker also cited slow progress on implementing Mario Draghi’s competitiveness recommendations, with only 11.2% adopted a year later. He further highlighted fragmentation within the Single Market, drawing on an International Monetary Fund study that suggests internal barriers create the equivalent of a 45% tariff on goods and a staggering 110% tariff on services, effectively hindering cross-border business and innovation.

To address these challenges, Walker outlined a three-pronged strategy for the EU to regain its footing in the AI landscape: establishing a foundation of smart policy, fostering adoption through workforce development, and scaling up to support widespread innovation. This approach emphasizes both regulatory reform and strategic investment.

He argued that the first step requires streamlining the AI regulatory landscape to create a framework conducive to innovation, while simultaneously ensuring focused, balanced, and internationally aligned regulations. This entails transitioning from a prescriptive approach to a more risk-based framework.

“Regulating in ways that support AI innovation means focusing on the real-world effects of AI,” Walker explained. This involves filling specific regulatory gaps rather than implementing sweeping rules that could inadvertently stifle beneficial and lower-risk applications. He advocated for regulators to “oversee outputs, not inputs—to manage risks and consequences, not micromanage science.” This echoes a growing sentiment within the tech community that over-regulation can hinder progress and innovation.

He proposed an aligned regulatory framework built upon existing regulations where appropriate and harmonised international standards. This enables providers to offer their latest AI models to EU citizens and companies. The goal should be to design rules that not only prevent harm but also actively foster innovation.

Walker reaffirmed Google’s commitment to Europe, citing 30,000 employees and significant infrastructure investments, including seven data centers and thirteen cloud regions. He noted that the European Commission is currently seeking input to shape this agenda and encouraged businesses to submit their views.

The second part of the strategy focuses on driving AI adoption by equipping individuals and organizations with the skills needed to effectively use these rapidly evolving tools. Walker emphasized the exponential rate of advancement in AI technology, noting that Google’s new AI models are now “300x more efficient than the state-of-the-art from just two years ago.”

To prepare citizens, Walker championed public-private partnerships to accelerate skills training. He highlighted Google’s decade-long effort to assist over 14 million Europeans in acquiring digital skills and its €15 million AI Opportunity Fund, which supports vulnerable populations in gaining foundational AI knowledge. He suggested replicating China’s model of government-led scaling, where successful pilot projects are rapidly expanded across the economy.

Building trust is crucial for increasing AI adoption in the EU. Walker cited Google’s Sovereign Cloud and AI solutions, which provide EU customers with full control over their data, ensuring compliance with local regulatory requirements and European values through partnerships with companies like Thales in France and Schwarz Group in Germany. This approach aims to address concerns about data privacy and security.

Finally, Walker outlined the third stage: scaling up. He urged a transition beyond chatbots, which he described as “just a tiny part of its potential,” and towards recognizing the scientific breakthroughs AI is enabling.

He cited Google DeepMind’s AlphaFold, which has created a database of nearly every protein known to science, now used by over three million researchers worldwide. This aids scientists at the University of Malta in understanding the genetic causes of osteoporosis. Another tool, GNoME, is revolutionizing materials science by discovering hundreds of thousands of new materials, potentially leading to applications in energy, transport, and clean water. These examples highlight the transformative potential of AI beyond consumer-facing applications.

Walker concluded with a direct call to action, emphasizing that the tools are ready and the potential is clear. “European leaders say AI leadership is at the top of their agenda—and it’s time to make those ambitions a reality,” he urged.

The Google executive stated that achieving this requires removing regulatory obstacles for innovators, accelerating research through partnerships, and broadly implementing AI tools to spark a new era of EU growth and compete effectively with geopolitical rivals like China.