European investments in technologies like AI, the metaverse, and blockchain appear reactionary rather than strategic. Recent developments, especially with the Chinese AI tool DeepSeek, raise questions about the viability of large-scale funding in these sectors. EU funding initiatives risk copying U.S. trends without critical consideration of potential impacts, signaling a need for a more thoughtful approach to technology investments in Europe.
European investment in emerging technologies like AI, the metaverse, and blockchain raises questions about their viability. Recent market behavior revealed concern over DeepSeek, a low-cost Chinese AI model, suggesting that major investments by companies like Meta and Google may not lead to significant returns. EU leaders are now proposing sizable financial packages for AI, seemingly ignoring these market dynamics. French President Emmanuel Macron recently announced a €109 billion investment, while European Commission President Ursula von der Leyen pledged €200 billion, including plans for new AI chip gigafactories.
However, these investments risk being merely reactionary, as they follow the hype surrounding U.S. tech developments rather than a calculated, strategic approach. Macron’s comparison of France’s investment to the U.S’s $500 billion Stargate AI project further complicates the logic, especially after the emergence of DeepSeek undermined confidence in such massive spending. There is growing skepticism about the practicality of generative AI, with some doubting that it will yield transformative applications or substantial profits for companies, as noted by critics like Goldman Sachs’ Jim Covello.
Moreover, OpenAI’s struggles, such as potential losses exceeding $5 billion in 2024, raise further concerns regarding the profitability of generative AI ventures. While there are applications of AI, the overall economic impact anticipated by proponents may be modest, with economists predicting only a 1% increase in GDP over the next decade. This growth raises the question of whether the hype surrounding generative AI overshadows more pragmatic solutions.
The EU’s GenAI4EU initiative, featuring a €500 million budget for generative AI exploration, seems focused on the current hype rather than alternative AI technologies that might offer better reliability and reasoning capabilities. Experts advocate for investments that prioritize these robust approaches rather than mirroring U.S. initiatives.
Previously, the EU has also closely followed U.S. trends in virtual reality (VR), demonstrated by the fervor surrounding Facebook’s Metaverse initiative led by Mark Zuckerberg. Despite initial excitement, analysts have cautioned against inflated projections, particularly highlighting the challenges of VR achieving widespread adoption. Current EU funding efforts remain committed to the metaverse concept, even amidst skepticism regarding its viability and demand.
Blockchain technology, once a darling of instant investment, has similarly faced a decline in interest post-2017, predominantly seen as enriching cryptocurrency fraudsters. The EU’s investment of €700 million in blockchain projects signals a lack of critical scrutiny in its technology funding. Europe’s tendency to chase U.S. trends exposes a need for a more discerning and self-assured policy in science and technology investment decisions. As we look toward the future, a reflection on today’s spending might reveal whether this trend leads to innovation or wasted resources.
Original Source: sciencebusiness.net
