The EU continues to invest heavily in emerging technologies like generative AI, despite concerns about their viability, evidenced by the rise of low-cost alternatives like DeepSeek. Recent commitments, including €200 billion in AI investments, may reflect a fear of missing out at the expense of strategic focus. Historical misinvestments in VR and blockchain also caution against blindly following US tech trends.
The European Union (EU) continues to invest heavily in emerging technologies such as the metaverse, blockchain, and generative AI, raising questions about the soundness of these investments. The recent development of DeepSeek, a low-cost Chinese AI tool that produces results comparable to those from major US tech companies, has caused concerns about the effectiveness of hefty investments in AI by firms like Meta, Google, and OpenAI. Critics have increasingly likened OpenAI’s valuation to a high-profile failure like WeWork.
At the Artificial Intelligence Action Summit in Paris, French President Emmanuel Macron highlighted a €109 billion investment in AI, funded largely by private entities, including substantial contributions from the UAE. In comparison, European Commission President Ursula von der Leyen announced an even larger €200 billion investment from the EU, which includes plans for new gigafactories to produce AI-focused chips. This response seems to ignore growing skepticism regarding the practicality and profitability of generative AI.
Potential concerns about generative AI have been voiced even before DeepSeek’s emergence. With over two years since ChatGPT’s introduction, critics argue there is insufficient evidence of transformative applications or profitability in AI. Goldman Sachs analyst Jim Covello stated that no significant cost-effective uses for generative AI have been discovered thus far. Additionally, OpenAI reportedly anticipates a loss of $5 billion in 2024, questioning whether such investments are prudent.
Further highlighting the need for caution, economists like Daron Acemoglu predict only a modest 1% growth to US GDP over the next decade from AI. The EU’s GenAI4EU initiative, which allocates €500 million to develop real-world applications, may disproportionately focus on generative AI while neglecting other promising AI technologies that could yield greater results.
The EU’s history of pursuing US-centric technological trends has previously led to misguided investments, particularly in VR and blockchain. The fervor surrounding VR and Meta’s ambitious metaverse project has waned, with substantial funding still devoted to it despite limited interest or adoption. Similarly, blockchain faced declining interest after initial hype, yet the EU committed €700 million to related projects without adequately assessing practical applications.
These examples illustrate a recurring pattern of the EU reacting to US technological trends with enthusiastic financial commitments, driven by a perceived competitiveness. A more balanced and critical approach could allow the EU to prioritize meaningful innovations rather than following the flashy trends from the US tech landscape blindly.
The EU’s pattern of chasing after technology trends from the US, such as generative AI, the metaverse, and blockchain, brings into question the effectiveness and practicality of substantial financial investments in these areas. Recent events highlight skepticism regarding the true potential of generative AI while underscoring past missteps with technologies like VR and blockchain. A more measured and critical approach is necessary to ensure that Europe’s investments lead to concrete innovations rather than following mere hype cycles.
Original Source: sciencebusiness.net
