The dysfunctional EU lags badly in AI. Rather than attempt to catch up, it places barriers.
Closed AI – the European Version
Eurointelligence discusses Closed AI – the European Version
The Europeans were the first in the world to have an AI regulation. But the Americans are the ones with the actual AI. Yesterday, OpenAI announced a $500 billion investment programme for new AI infrastructure, of which $100bn are to be deployed immediately. The Europeans are totally asleep at the wheel. OpenAI is right to say that AI will support the re-industrialisation. This is because industry 3.0 will require AI to optimise production processes. The way this works is that many sensors will be attached to each node of a production line, and data generated will be transmitted to a data centre, which analyses the data and feeds the information back to the company, to be used for quality control and manufacturing logistics.
We reported at one point about the German association of the electrical engineering industries, ZVEI, that they placed many of their hopes in European data centres. But our heart sank when we heard them saying that the number one priority of German companies was data security. That is the cloak under which investments are delayed. Data security should be a constraint, not a priority. Gottlieb Daimler, the inventor of the motor car, did not obsess with road safety. That came later. The Europeans have turned this upside down. The priority should be to get this going.
The sums involved are too large for governments. What government need to do is take into account the effects of AI on the future energy policy, and on regulation. The EU is a hostile territory for the AI industry on both accounts. The tragedy is that European engineers are some of the pioneers of AI technologies.
The leverage for such sums can only be provided by a large and integrated capital market, or by consortia of companies and banks. It would be wrong to think of AI as just another industry. It is not even clear that the AI industry will be as profitable as current market valuations, because AI is not a franchise at the software level. It becomes a franchise through large infrastructure. The reason why it should matter for the EU is that AI is on course to become one of the principal determinants of industrial competitiveness.
Private-Sector $500 Billion Investment
In contrast the EU placing roadblocks, Trump Announces Private-Sector $500 Billion Investment in AI Infrastructure.
President Donald Trump on Tuesday talked up a joint venture investing up to $500 billion for infrastructure tied to artificial intelligence by a new partnership formed by OpenAI, Oracle and SoftBank.
The new entity, Stargate, will start building out data centers and the electricity generation needed for the further development of the fast-evolving AI in Texas, according to the White House. The initial investment is expected to be $100 billion and could reach five times that sum.
“It’s big money and high quality people,” said Trump, adding that it’s “a resounding declaration of confidence in America’s potential” under his new administration.
Joining Trump fresh off his inauguration at the White House were Masayoshi Son of SoftBank, Sam Altman of OpenAI and Larry Ellison of Oracle. All three credited Trump for helping to make the project possible, even though building has already started and the project goes back to 2024.
“This will be the most important project of this era,” said Altman, CEO of OpenAI.
Ellison noted that the data centers are already under construction with 10 being built so far. The chairman of Oracle suggested that the project was also tied to digital health records and would make it easier to treat diseases such as cancer by possibly developing a customized vaccine.
AI is coming and it will require a lot of energy. Trump wisely rescinded Biden’s demand that energy be from green energy.
How fast we see change may depend on lawsuits.
Musk Pours Cold Water on Trump-Backed Stargate AI Project
The Wall Street Journal reports Musk Pours Cold Water on Trump-Backed Stargate AI Project
President Trump stood alongside prominent tech executives at the White House on Tuesday to unveil what he called a “tremendous” and “monumental” $500 billion artificial-intelligence infrastructure project. Hours later, Elon Musk publicly raised questions about whether the joint venture would ever get off the ground.
Late Tuesday night and early Wednesday morning, Musk wrote on X, his social-media platform, that two of the companies behind the project don’t have enough capital to follow through on their pledges.
“They don’t actually have the money,” Musk wrote at 11:35 p.m. ET on Tuesday, replying to a post from OpenAI, the ChatGPT maker that announced the joint venture with global tech investor SoftBank Group and database company Oracle. At 12:57 a.m. on Wednesday morning, Musk added, “SoftBank has well under $10B secured. I have that on good authority.”
Musk has sued OpenAI, calling the company a “market-paralyzing gorgon.” People close to Musk have said he despises Altman, The Wall Street Journal has previously reported.
Musk’s artificial intelligence startup, xAI, is a potential competitor to both OpenAI and SoftBank.
Microsoft, OpenAI’s largest investor, was named a “technology partner” in the project, meaning the company will be involved in creating Stargate’s infrastructure. “Look, all I know is, I’m good for my $80 billion,” Microsoft CEO Satya Nadella told CNBC when asked about Musk’s social-media posts.
It isn’t the only time Musk has publicly weighed in on one of Trump’s decisions. After the election, Musk threw his support behind transition co-chair Howard Lutnick to be Treasury secretary over longtime investor Scott Bessent. Musk’s comments came as Lutnick, Bessent and their allies were battling over who should be chosen for the crucial job. Trump eventually picked Bessent to run the Treasury and Lutnick got the nod for Commerce secretary.
I keep wondering when Musk’s mouth will get in the way of his relationship with Trump.
So for, DOGE has not come up with a single major idea that has not been discussed before. And other than trivial ideas, DOGE cuts will take acts of Congress, not executive orders to do much of anything.
This is Musk’s second big disagreement. Trump was not at all happy about Bessent, one of Trump’s better picks.
Pouring cold water on Trump’s ideas does not bode well for a lasting relationship. There is only room for one big ego-mouth in the room.
The moment Musk crosses the line on usefulness to Trump, Musk will be gone.
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