For the first time in modern economic history, Europe finds itself on the sidelines of global progress. Having failed to capitalise on the technological revolution brought about by the Internet, Europe now finds itself on the sidelines in strategic areas such as artificial intelligence (AI), semiconductors and the cloud, all of which depend on technologies developed elsewhere. Europe is clearly lagging in the field of AI in particular. The dominance of the American tech giants is indisputable when it comes to private investment, computing power and the concentration of talent. Meanwhile, China is forging ahead at breakneck speed on the back of an ambitious national strategy. According to data from Stanford University’s Artificial Intelligence Index Report 2025, US private investment in generative AI has reached $29 billion, almost 20 times that of Europe ($1.5 billion).In his report on the future of European competitiveness, published in September 2024, Mario Draghi calls for urgent action: if Europe still wants to play a significant role on the global stage, it must stop thinking small and commit resources that match the scale of the economic and geopolitical challenge.
As the tectonic plates of geopolitics shift, European initiatives – such as InvestAI and the AI Continent action plan – signal a growing awareness of the technological, strategic and economic challenges posed by AI. The European Union has set itself the ambitious goal of mobilising €20 billion and to deploingy up to five gigafactories, each four times more powerful than conventional AI facilities. Moreover, Europe’s geopolitical reorientation, strengthened autonomy, and proactive fiscal policy have generated positive momentum, further fuelled by declining trust in the United States. Capital flows into European assets have surged in recent months, driven by a perception of stability and predictability.
As I highlghted during the Nexus 2025: “Luxembourg must seize this new momentum. Small in size, we must think big. With our ambition, vision, and assets, we are poised to establish ourserlves as a major European hub for AI – a true LuxAIhub: to boost productivity and position itself as a major European hub for AI – a true LuxAIhub.” That is precisely why the Chamber of Commerce has taken the lead in helping the government develop a new national AI strategy (published on 19 May). In September 2024, the Chamber launched a working group that brought together private and public stakeholders in this sector. Unveiled on 20 May this year, the group’s “LuxAIhub” report sets out 1 prerequisite and recommends 30 measures aimed at propelling Luxembourg to the forefront of European AI.
Coordinating initiatives through a national AI Platform
The success of Luxembourg’s national AI strategy will depend heavily on how well its implementation is coordinated. At present, initiatives remain fragmented and suffer from a lack of alignment among the various stakeholders. So what can be done? The report calls for the creation, by September 2025, of an AI Platform under the leadership of the Prime Minister, backed by a dedicated budget. This platform would provide a regular forum for dialogue between public authorities, private-sector actors and the research community, with the goal of coordinating national efforts and ensuring structured oversight of the strategy’s rollout. Without coordinated leadership, these ambitions will fall flat.
Using AI to boost productivity
Luxembourg’s productivity has been stagnating for over a decade. AI – particularly generative AI – is a productivity tool we would be wrong to ignore. Luxembourg ranks 11th out of 174 economies in the IMF’s AI Preparedness Index 2024, suggesting that the country is well-positioned to harness AI’s productivity-boosting effects, especially in the financial sector.
AI’s prominence in the new strategy, both as a tool for improving efficiency in the public sector and as a factor in the competitiveness for enterprises in general and in the financial sector in particular, sends a strong signal. On the financial front, joint mobilisation of public authorities and private-sector players is crucial. The competitiveness of the sector depends on it. To take things a step further, the report proposes facilitating the full or partial implementation of AI-oriented transformation projects in Luxembourg by major international financial groups.
Strengthening and diversifying financing
The launch of ChatGPT in late 2022 signaled the start of a frantic race to invest in AI. While the technology itself is not new, the dramatic advances in its capabilities, combined with its widespread adoption by the general public, have led to a veritable economic scramble. The American tech giants were quick to react, making multi-billion-dollar commitments and extending their lead regarding private investment in AI. The top ten AI companies by market capitalisation? American – every single one. Europe’s leading company, meanwhile, ranks a distant fortieth.
What’s holding back Europe’s innovators today is not a lack of ambition, but rather rapid access to substantial funding. To keep these companies in Europe and stem the brain drain, the report calls for a massive increase in private financing. Key proposals include attracting the front offices of private equity and venture capital funds to Luxembourg, making it easier for individuals to invest in these asset classes, and reinforcing public-private co-financing mechanisms.
Facilitating the transition from R&D to marketing
Accelerating the transition from R&D to marketing means turning innovation into a real driver for growth. In this context, the creation of a Deep Tech Lab – a proposal put forward by the Chamber of Commerce’s working group and taken up by the Prime Minister – is a welcome development. Its inclusion in Luxembourg’s national AI strategy is a strong signal. By bringing together researchers and engineers, this technology campus will promote academic excellence through spin-offs, technology transfer, and talent retention. Concretely, the report recommends the creation of a public-private partnership backed by an existing structure that combines public funds and private investment.
Luxembourg has what it takes to become a European leader in digital and technological innovation. To achieve this, it must act quickly, decisively and in a coordinated manner, through a clear and structured governance. Our economic competitiveness, our capacity for innovation and our digital sovereignty are all at stake.