EU AI Investment, Too Small to Catch Up

Today, EU govenrment announced. It'll pledge €50 billion of the government investment to the AI sector marking how serious they are in this race to catch up against US and China. The plan is to bring enough private investment to reach €200 billion (roughly $200 billion) investment in AI as a whole.

Based on the news the time period of such investment seems unclear.

EU chief Ursula von der Leyen on Tuesday, February 11, announced a push to channel €200 billion in public and private investments into Europe's nascent artificial intelligence industry. "We aim to mobilize a total of €200 billion for AI investments in Europe," the European Commission president told a Paris AI summit, saying the EU would contribute €50 billion with the rest pledged by "providers, investors and industry."

French Macron also announced yesterday on the AI investment of $113 billion, but that was solely private sector (ie: wishful thinking). There was no commitment of public money. We can assume individual European country is investing in AI through EU initivative.

US

That was in response to Startgate AI investment project that promised to invest $500 billion in US over the next 4 years. That is purely private sector led, and there is no public investment announcement under Trump administration. So EU government has some lead. But the total pledging of €200 billion still falls far short off Startgate project.

China

On China end, the government is heavily involved in VC investment so it is unclear, how much of it is the government led project or private.

According to Stanford Center on China's Economy and Institutions, the Chinese government invested $912 billion through VC since 2015, of 23 percent of which is directed towards AI. Let's say $104 billion was invested in the last 5 years on AI.

China recently announced the new $8.2B AI investment fund to fight the trade war.While China does not have an official statement of how much China will invest in total, it is reasonable to assume the government public funding on AI at the scale of $100-200 billion will continue through 2030.

In total with private and public sector, China's AI investment and financing totaled 377.62 billion RMB (US$52 billion) in 2023. That will amount to $260 billion over the next 5 years.

Far surpassing EU's.

Japan

It doesn't make a major headline, but Japan is secretly investing heavily into AI. In a nutshell, Japan announced last year that it is investing 10 trillion yen through 2030.

That is $65 billion at today's exchange value. That is planning to top up the AI investment to 50 trillion yen ($328 billion). That is in the next 10 years. It'll be 25 trillion yen ($164 billion) the next 5 years with the private sector.

That falls short of US investment, it is outmatching EU by far given the relative size.

Prime Minister Ishiba announced his intention to establish a new framework to provide public support totaling more than 10 trillion yen over the seven years up to fiscal 2030 for technological development and capital investment in the fields of AI and semiconductors in Japan, and to link this to public and private investment of more than 50 trillion yen over the next 10 years

石破総理大臣は、11日夜の記者会見で国内のAIや半導体の分野の技術開発や設備投資に対し、2030年度までの7年間であわせて10兆円以上の公的支援を行う枠組みを新たに設け、今後10年間で50兆円を超える官民投資につなげる方針を明らかにしました。- NHK, November 2024

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