Brussels has invested heavily in technologies like the metaverse, blockchain, and generative AI, spurred by concerns of missing out on U.S. advancements. The launch of a low-cost AI tool, DeepSeek, raises doubts about the viability of these investments, prompting questions regarding their profitability and practicality. With concerns over generative AI’s transformative applications, the EU is urged to explore diverse AI technologies rather than mimic U.S. strategies, ensuring investments lead to real-world benefits.
Brussels has invested significantly in emerging technologies like the metaverse, blockchain, and generative AI, but these investments raise questions about their validity. The recent emergence of DeepSeek, a low-cost Chinese AI tool producing comparable results to leading U.S. tech firms, has sparked doubts regarding the value of substantial investments in U.S.-led AI advancements. Investors worry that funding massive AIs might be futile when cheaper alternatives exist.
At the Artificial Intelligence Action Summit in Paris, French President Emmanuel Macron announced a €109 billion investment, mainly supported by private funds from investors in the UAE. Similarly, European Commission President Ursula von der Leyen mentioned an ambitious €200 billion EU investment plan, which includes building several AI chip factories. This posits the question: Are these investments wise, or a reaction to the current AI hype?
Macron noted that France’s funding is comparable to the U.S. $500 billion Stargate AI initiative, launched post-Trump’s presidency. However, DeepSeek’s rapid emergence casts doubt on such extensive financial commitments to AI. The tech sector faces skepticism regarding the profitability and practical applications of generative AI tools, leading to further concerns about overvaluation and sustainability.
Even before DeepSeek’s debut, skepticism was rising about the effectiveness of generative AI technologies like large language models. Analysts have noted a significant lack of transformative applications within the 26 months since generative AI tools like ChatGPT became widely available. While OpenAI has millions of paying subscribers, their financial viability remains questionable as the firm projects substantial losses in the coming year.
Additionally, experts predict that AI’s overall economic impact will be modest. Some economists estimate it could only contribute 1% to the U.S. GDP over the next decade, leading to concerns that excessive investment could lead to a tech crash. This raises critical questions about whether the focus should shift toward more reliable forms of artificial intelligence with real-world utility.
Caution is advised as the EU becomes engaged in generative AI trends. The EU’s €500 million GenAI4EU project to explore generative AI applications may overlook other AI technologies that hold more promise. Encouraging diverse and innovative approaches to AI could yield better outcomes rather than mimicking U.S. firms’ strategies.
The EU’s historical pattern of investing in U.S.-driven technologies calls for reflection. The excitement around VR technology faded after initial promise, and similar disillusionment with the promises of the Metaverse has emerged. Mark Zuckerberg’s vision for an interconnected virtual reality has led to billions in losses for Meta, questioning the viability of such investments moving forward.
Despite early interest, the blockchain craze revealed itself as overhyped, heavily associated with unproven cryptocurrency ventures. Even with a €700 million expenditure on blockchain projects from 2016 to 2024, the EU finds itself committing funds to a technology that remains speculative at best. Such cases illustrate a pattern of subscribing to trends without thorough analysis or consideration of potential drawbacks.
Europe’s repeated financial commitments to fleeting tech trends, driven by a perceived need to match U.S. advancements, reveal an inferiority complex. The EU should adopt a more confident stance in its tech policies, requiring greater scrutiny of emerging trends and their promoters, ensuring that future investments yield tangible benefits instead of fostering potentially misguided financial decisions in the name of innovation.
Original Source: sciencebusiness.net
