Reindustrialising Europe with artificial intelligence

As the global race to dominate artificial intelligence (AI) accelerates, Europe finds itself at a crossroads. With the United States and China rapidly advancing in innovation and deployment, the European Union must act decisively to secure its economic future. At the heart of this response lies the AI Continent initiative—an integrated strategy to build competitive, responsible, and sovereign ecosystems. Although often presented as a digital policy, its impact will be most tangible at the industrial core of Europe.

Historically, Europe has been a benchmark in sectors such as automotive, aerospace, energy, and advanced manufacturing. However, competitiveness is no longer defined solely by physical capital or skilled labour, but by the ability to integrate AI at scale. Without progress on this front, Europe risks falling behind in productivity, innovation, and control over the value chain. Digital fragmentation, legacy systems, and limited access to key infrastructure—such as computing power and big data—continue to hinder its competitive capacity. Despite its leadership in research and ethical frameworks, Europe struggles to scale innovation.

In this context, AI Continent is conceived not only as a lever to build digital capabilities, but as a genuine industrial strategy. Framed within the EU’s Digital Decade and aligned with initiatives such as the Green Deal, the Global Gateway, and the US Chips Act, the plan aims to infuse the European economy and industry with AI.

To avoid the usual national fragmentation, AI Continent proposes a structured, continent-wide response, aiming to pool the resources and capabilities of Member States around a robust, coordinated, and competitive ecosystem.

Strategic deployment

One of its priorities is to accelerate the use of AI in strategic sectors such as advanced manufacturing, mobility, energy, and healthcare. These fields, where Europe concentrates much of its added value, offer high potential to improve productivity, sustainability, and quality of life.

The plan also includes the development of shared infrastructure to overcome current limitations in data and computing access. It advocates for sovereign cloud platforms, federated data spaces, and high-performance computing nodes, articulated through AI factories and giga AI factories, conceived as the technical pillars of the European ecosystem.

The collaborative dimension is reinforced through testing and experimentation facilities and digital innovation hubs, which enable the validation of technologies in real-world conditions and facilitate access for businesses—especially SMEs—to tools, capabilities, and technical support.

Ethics, in turn, occupies a central role: AI Continent promotes trustworthy AI, centred on people and aligned with the EU’s democratic values and fundamental rights.

To ensure economic sustainability, the plan calls for a determined mobilisation of public-private investment, relying on programmes such as Horizon Europe, Digital Europe, and the Recovery and Resilience Facility. The goal is to reach a scale that allows Europe to compete with global tech powers.

Comprehensive vision

The plan does not view AI as an isolated sector, but as a general-purpose technology capable of transforming production across the board. It starts from a clear premise: only if AI is fully integrated into European industrial ecosystems can it become a true driver of competitiveness. Its approach, therefore, goes beyond fostering isolated innovation and seeks mass, structural adoption—especially among SMEs, where there is still significant room for productivity improvement.

One of the key aspects is reducing technological dependence on non-EU providers. This is particularly critical in strategic sectors such as healthcare, defence, or energy, where AI systems already influence sensitive decisions. To reduce this vulnerability, the plan promotes sovereign infrastructure and the consolidation of European tech champions, thereby strengthening industrial autonomy in the face of third-country platforms and cloud services.

Moreover, the AI-driven transformation is already delivering tangible results: predictive maintenance, digital twins optimising energy consumption, or machine learning systems improving quality control or the design of new materials. The aim is to extend these advances across the entire European industrial base, so that benefits are not concentrated solely among a small group of digital-native firms, but are distributed across sectors and regions.

This becomes even more relevant considering that one of the great strengths of Europe’s industrial fabric is its SME ecosystem. Many of these lack the technical, human, or financial resources to adopt advanced AI solutions. For this reason, AI Continent promotes instruments such as the aforementioned AI factories, digital innovation hubs, and testing facilities. All of them aim to lower entry barriers, provide technical support, and facilitate funding. Ultimately, the goal is to democratise access to AI.

Finally, the plan intertwines its technological ambition with the green transition. The convergence between AI and sustainability generates concrete opportunities—from optimising energy grids to reducing logistics emissions. The plan promotes applications that not only enhance competitiveness but actively contribute to the objectives of the European Green Deal. It is a vision that does not pit innovation against sustainability, but rather articulates them as pillars of a new industrial model.

Key challenges

Despite its ambition, the success of the plan faces significant challenges. One is the shortage of specialised AI talent, exacerbated by brain drain to the US or the UK, where salary, technological, and regulatory conditions are more favourable.

Another hurdle is the lack of advanced computing infrastructure, especially compared to US tech giants. Without sufficient computational capacity, it is difficult to develop complex models or process large volumes of data.

Regulatory uncertainty is also a concern. Although the new AI Act establishes a pioneering framework to protect rights and build trust, its implementation must be pragmatic. Otherwise, it could stifle innovation, particularly in early development stages.

Institutional fragmentation among Member States is another risk. If not implemented in a coordinated manner, Europe could progress at different speeds depending on national capabilities, creating an uneven and less competitive ecosystem.

Coordinated public-private action

To overcome these challenges, the plan must be underpinned by clear strategic priorities. The first is to scale up investment in applied research, talent training, and high-performance infrastructure. Sector-specific public-private partnerships are also required to facilitate the integration of AI into value chains.

A second priority is the development of regulatory testing environments (regulatory sandboxes) that enable experimentation with AI under flexible supervision. Furthermore, it is crucial to simplify access to European resources for SMEs and industrial clusters, which often face greater difficulties in leveraging institutional mechanisms.

Lastly, it is essential to promote cross-border collaboration in data and innovation to avoid duplication, improve the efficiency of the European system, and ensure that advances are interoperable and scalable.

The future of European industry will depend largely on whether this vision becomes a reality. In this process, key actors such as Zabala Innovation are already actively contributing to building the new ecosystem. Their role in initiatives such as AI-BOOST—a European challenge-based competition designed to accelerate the development of emerging AI technologies—is an example of how public-private collaboration can translate strategic ambitions into concrete results. The race for artificial intelligence is not only technological: it is also industrial, geopolitical, and above all a question of long-term vision. Europe still has time to lead it.