In 2023, Mario Draghi cautioned that “Europe risks becoming irrelevant if it does not swiftly overcome its structural weaknesses and aggressively nurture its digital and AI ecosystem.” Two years on– and Europe has yet to stand on its own data feet. Bernhard Lorentz, Managing Partner and Global Climate and Infrastructure Leader at Deloitte, discusses why Europe cannot afford to outsource its future.
AI is fast emerging as the defining technology of the 21st century, transforming society and the economy, accelerating innovation, and boosting productivity. Because it touches virtually every sector, including the most critical ones like public health, infrastructure, and national defense, AI is now a matter of national interest.
At the same time international trade conflicts and political tensions are increasingly contributing to political and economic uncertainties. In AI, this translates into rising concerns about digital sovereignty, data security, and dependable access to advanced technologies - areas where Europe remains vulnerable, with domestic cloud providers holding only 2% of the market.
European Privacy Shields may provide inadequate protection from surveillance, since foreign authorities could still access data held by international companies - even when stored in Europe. In the worst case, Europe’s overdependence could even leave critical services vulnerable to shutdowns – triggered not by technical failure, but by political decisions made outside Europe’s borders.
To avoid being caught in the crossfire of digital conflicts, Europe must move fast to build its own critical AI infrastructure, protecting sensitive data from extraterritorial access and reducing the risk of politically driven service disruptions.
The European Union has started to act: In April 2025, the European Commission unveiled their AI Continent Action Plan, a strategic blueprint to position Europe as a global leader in AI. Through Invest AI, a €200 billion initiative that includes €20 billion to set up AI giga factories, the EU aims to accelerate infrastructure development and to triple the EU’s data center capacity within 5-7 years. A key focus is on a highly sustainable infrastructure, ensuring that this growth aligns with Europe’s climate goals.
Now it is time for the EU to leave the committee rooms behind and get shovels in the ground, building its own architecture on multiple construction sites at once.
Part of the challenge will be structural. Unlike the integrated market of the US or China’s centrally coordinated strategy, Europe’s digital landscape remains fragmented. Differing national regulations, permitting processes, and technical standards pose practical barriers to cross-border deployment of AI infrastructure. A “Digital Single Market” – with harmonized rules, alongside coordinated cross-border investment,and greater better knowledge sharing – will be essential if Europe wants to build competitive and sovereign AI.
We also know by now that AI data centers are energy-hungry. A single 200-megawatt facility can consume as much electricity as a city of 350,000 people. With Europe’s push for AI sovereignty, our research shows demand for data center power could rise by 70% by 2030. To keep pace, Europe must massively expand renewable energy and strengthen grid connections so that AI factories can be built and scaled. Done right, this would position Europe as the global leader in sustainable high-performance computing.
Finally, the scale of investment will decide Europe’s AI future. The EU and its Member States must mobilize vast sums to keep up with other regions. Germany alone will need some €60 billion for AI infrastructure and data centers by 2030, according to our recent estimates. Driving private investment will be essential. The EU must provide clear, predictable regulation, offer smart incentives, and foster public-private partnerships to lower entry barriers for European cross-border investments.
AI is rapidly becoming mission critical to national economic and security interests. Mario Draghi’s warning still stands: Without bold action, Europe risks sliding into irrelevance, with severe risks for its economic competitiveness and security. The AI Continent Action Plan is a solid foundation,but policymakers must turn strategy into execution. Here is how:
First, fast-tracking permits for AI data centers, coordinating cross-border infrastructure planning, and launching targeted investment programs for chip production and sustainable energy supply. Second, simplifying and harmonizing regulation and prioritizing public-private partnerships to unlock private capital and scale deployment. Third, acting across the full AI stack – from chip design and fabrication to cloud infrastructure and sovereign data governance – to ensure resilience and competitiveness.
Consequently, it all boils down to this: Only by massively expanding sustainable high-performance computing capacity can Europe attract top talent and boost AI innovation on European soil, under European rules.
Bernhard Lorentz is a Managing Partner and Global Climate & Infrastructure Leader at Deloitte. He supports global companies in their “Great Transformation” towards a decarbonized future and defines new pathways to accelerate this transformation for entire industries. Bernhard is founding chair of the Deloitte Center for Sustainable Progress, a founding member of the Hertie School, the Mercator Institute for China Studies, Agora Energiewende, the Mercator Institute for Global Commons and Climate Change, and the Climate Neutrality Foundation. He is also an Honorary Professor at the Free University of Berlin.
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