Shaping the intelligent age: Building European technology champions able to compete at the global level

There has never been a more important time for Europe to be in control of its digital destiny. Nor a better opportunity.

The world is accelerating into a new economic era powered by the rapid rise and integration of transformative technologies like AI. But though it promises to deliver so many benefits, this ‘Intelligent Age’ – as the World Economic Forum’s ‘LGC | Leaders for European Growth and Competitiveness’ termed it – has coincided with a period of significant volatility and heightened global rivalries. Or as European Commission President, Ursula von der Leyen, put it: “...a new era of harsh geostrategic competition.”

Despite possessing the research excellence, industrial capability, and talent required to thrive in the Intelligent Age, Europe is at risk of falling behind (and losing digital sovereignty to) China and the US. Success in this geostrategic competition requires Europe to reduce its commercial and technical dependency on these nations, investing in its own infrastructure, technologies and people.

But achieving this means unshackling European innovators in the digital space, providing companies with the conditions and finance to scale and compete at the global level. Building these technology champions is something at which Europe has historically struggled. With AI rewriting what’s achievable on a daily basis, now is the time for Europe to buck this trend by acting quickly and acting together – not as an uncoordinated policy patchwork of nation-states.

The alternative is Europe becoming a passenger in the Intelligent Age rather than an architect of its own future.

Europe’s technology gap

Despite the commercial advantages of being the world's largest trade bloc in combined goods and services, and a thriving industrial and scientific base, Europe has been outpaced by the US and China in the Intelligent Age.

US hyperscalers control nearly 70% of Europe's cloud market, while China leads in AI patents. Europe has produced just three foundation AI models to the US's 40 and China's 15. Similarly, the US accounts for nearly three-quarters (74%) of global high-end compute, with China at 14%, and the EU 4.8%.

Investment tells a similar story. Federal Reserve analysis puts cumulative private AI investment since 2013 at over $470 billion in the US, against roughly $50 billion across EU countries. Chinese local government venture funds alone have directed $184 billion to nearly 10,000 AI-related firms.

The gap shows up in AI industrialization too: 81% of AI-using US firms have deployed GenAI across more than two business functions, against 55% of their European counterparts.

The result is a scale-up problem. Only four of the world's top 50 tech companies are European, and Europe counted just 331 unicorns in 2025 against 1,963 in the US. Closing this AI-fueled technology gap will require a commercial environment where innovators can scale seamlessly across the continent and beyond. An environment in which tech champions thrive.

Tech brain drain reversal offers Europe a window of opportunity

“Too much of our top talent is leaving the EU because it is easier to grow their companies elsewhere,” said President von der Leyen back in 2025. However, since then, funding cuts and political uncertainty in the US have created a rare reversal in the flow of tech talent. According to the WEF, more technology workers are moving from the US to Europe than in the opposite direction.

This gives Europe a narrow, time-sensitive window to create the conditions in which top researchers, engineers, and founders want to build and – crucially – want to stay. But this inflow is fragile: some EU technology professionals earn less than half as much as their US counterparts in similar roles, and without competitive pay, equity incentives, funding, and career paths the current momentum could quickly dissipate.

To turn this talent flow shift into enduring competitive advantage, Europe needs to address these imbalances for tech workers rapidly – at a continental level, not country-by-country. With this sort of coordination, Europe can become a haven for scaling global tech organizations drawing on talent from around the globe.

Building European tech champions

Europe cannot allow the dominance by (and dependence on) overseas businesses within AI and related fields to continue. When geopolitical tensions are placing immense strain even on decades-old alliances, strengthening digital sovereignty is both a commercial and strategic imperative.

This makes it vital to form a coherent strategy to create technology champions. A strategy that plays to the EU’s strengths and overcomes the fragmentation challenges inevitable when 27 countries try to act as a single bloc. Here are four practical levers that should be factored into this overall strategy:

Create a single, streamlined springboard for scaling-up

Former Italian Prime Minister and current President of the Jacques Delors Institute Enrico Letta recently observed: “If the EU doesn't stand united, we won't be competing with Washington and Beijing – we'll be handing them gifts.” He’s exactly right. Europe, and specifically the EU, has to come together as a seamless, single entity to leverage its strength and give would-be tech champions the right environment to scale to global levels.

Because while the EU is the largest single trading bloc in the world, it's also 27 individual countries with 27 different legal frameworks and more than 60 legal company types in place. This fragmented regulatory and bureaucratic landscape poses a significant obstacle to successful scale-up. It slows growth and makes fixed investment more costly because companies cannot serve the whole European economy from a single regulatory, commercial, or operational base.

Illustrating the problem, a recent survey of European tech founders showed 79% had been materially impacted by EU regulatory complexity. It caused 58% to delay cross‑border market entry, while 52% avoided EU markets over compliance concerns, and 44% lost or delayed deals. Damningly, nearly a quarter (24%) of tech founders are considering or have already relocated HQ due to regulation complexity.

That's why accelerating adoption of measures such as the EU Commission's 28th Regime is crucial. This proposed corporate law framework would give innovative companies an overarching alternative to those 27 national systems: the ‘EU Inc.’ company form, designed to let start-ups and scale-ups establish, finance, and grow across the Single Market without relocating outside Europe. Every week that passes without this simplified, coordinated approach in place will see tech unicorns move overseas where the barriers to globalization are lower.

Address funding gaps

A big part of Europe’s problem in scaling tech businesses to global levels is funding. Europe must integrate not only the markets and regulatory frameworks in which technology companies operate, but also the capital market in which they are financed.

The EU’s Savings and Investment Union should look to break down national barriers between investors and companies, channel more institutional capital into high-growth businesses, and create credible exit routes through acquisitions, public listings, and secondary markets. Because Europe has a significant funding gap compared with its geostrategic rivals.

Simply put Europe needs to tackle the funding gaps that are causing many would-be tech champions to seek financing overseas. The EU hosts over 40,000 VC-funded tech companies, and creates more than any other region globally – but most struggle to transition into global-scale businesses without having to relocate or sell to foreign buyers.

Scale is part of the issue: there are simply more US-located VC funds and they tend to be larger than their European counterparts. ECB data puts total fund size in the US at around €930 billion, around six times as much as the ~€150 billion of funds located in the EU.

However, the most vital area to address is the later-stage funding bottleneck. Smaller funds and fragmented national capital markets have meant European tech start-ups have consistently struggled to raise the huge sums necessary to expand onto the global stage, in stark contrast to their US-backed counterparts. The EU Commission's Draghi Report indicates that in 2023 the EU's later-stage VC investment stood at $18 billion, compared with $100 billion in the US. Closing this gap is essential to nurturing promising start-ups into European tech champions.

Developing and investing in sovereign infrastructure

Europe does not need to develop more frontier AI models, but it should build a sovereign AI compute, cloud, and energy infrastructure on its own soil, and under its own control. This provides homegrown businesses with a secure, high-tech foundation. This is key to breaking the reliance on overseas core infrastructure supporting AI and other frontier technologies.

This approach will give local start-ups the reliable, massive computing power and clean energy they need to scale up rapidly. Equipped with these secure digital foundations, European firms can safely innovate, share data across borders, and confidently consolidate to compete on the global stage.

The EU is stepping up to this challenge. It has deployed 19 AI Factories in the past 18 months, launched a formal process for up to seven AI Gigafactories, created a €20 billion AI-compute financing facility, awarded a €180 million sovereign-cloud contract for EU institutions and agencies, and begun integrating data centers into its energy and digital infrastructure planning. Continuing and extending this infrastructure rollout will secure digital sovereignty for developing European tech champions.

But building sovereign infrastructure is only half the task. Europe must also use public procurement to create a core market for it – making EU governments anchor customers for open-platform European technology. Not just in the form of policy commitments, but in actual investments.

Accelerating industrial AI adoption

With initiatives such as the AI Continent Action Plan and the Apply AI Strategy, Europe's leaders have acknowledged that accelerating and broadening the industrialization of AI is crucial to the continent's strategic and commercial future.

The ability to move AI beyond pilot programs is also a commercial catalyst for potential tech champions. When businesses expand AI into full production use, they become larger, longer-term customers for the tech companies supplying those tools. They can give European start-ups and scale-ups the revenue and proven demand needed to attract the later-stage investment required to grow into global players.

However, the European Commission identifies limited access to high-quality, interoperable data as a structural barrier to AI adoption, and its 2026 analysis of agentic AI points to fragmented data as an obstacle to scaling deployment. To maximize the speed and impact of AI rollout, European companies and legislators need to remove impediments to the free flow of business data, giving AI the full context it needs to make decisions aligned with goals. Open tech architectures are equally vital, preventing established vendors from locking European AI innovators out of the tech stack.

A bright future for Europe (and its technology champions)

Europe can and has built tech giants to rival the world’s best. To accelerate this process in the AI era, European governments must unite to offer emerging tech champions tangible support in the form of investment and in the removal of unnecessary obstacles to global growth. Without these roadblocks, the continent will be able to convert its innate strengths into technological sovereignty and success at scale.

That means tech champions built on the Single Market's size, stable institutions, and a regulatory environment, including the EU AI Act, that other regions increasingly look to for trusted AI governance. It means leveraging Europe's industrial advantage: as President von der Leyen put it in her 2026 State of the Union Address, the continent's industries sit on a “precious European treasure” of high-quality data, capable of powering tailor-made industrial AI models. It means retaining the researchers and engineers Europe trains, rather than watching them build their careers and companies elsewhere. And it means technology shaped by European commitments to democratic values and individual rights – not by scale and speed alone.

Heavy dependency on the US and China leaves Europe unable to act on its own terms when those countries' interests or values diverge from our own. Building European technology champions to shape the Intelligent Age will ensure success and sovereignty come hand-in-hand.

Editor’s note: This article is an expanded version of, “How building European technology champions can give Europe a competitive edge in the Intelligent Age,” originally published by the World Economic Forum.

Image Credit: Photo by Guillaume Périgois on Unsplash