The European Commission has unveiled a €1 billion ($1.1 billion) plan aimed at expanding the use of artificial intelligence across critical industries, marking one of the bloc’s boldest efforts yet to close the widening technological gap with the United States and China.
The plan, announced Wednesday in Brussels, forms the core of the EU’s “Apply AI” strategy — an initiative designed to accelerate AI integration across the economy, foster homegrown innovation, and reduce Europe’s dependence on foreign technologies.
The move also reflects Europe’s growing anxiety over its lagging position in the global AI race, as U.S. companies like OpenAI, Google, and Microsoft, and Chinese counterparts such as Baidu, Alibaba, and Tencent, dominate AI development, cloud computing, and chip production.
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“AI Made in Europe” Vision
European Commission President Ursula von der Leyen said the plan represents a turning point for the continent’s digital future, reiterating her vision for “AI made in Europe.”
“I want the future of AI to be made in Europe,” von der Leyen declared in a statement. “AI adoption needs to be widespread, and with these strategies, we will help speed up the process. We will drive this ‘AI first’ mindset across all our key sectors, from robotics to healthcare, energy, and automotive.”
The Apply AI initiative follows an earlier April 2025 action plan aimed at easing the heavy compliance and cost burdens of the EU’s AI Act, the world’s first comprehensive regulation on artificial intelligence, which came into force in August 2024.
While the AI Act positioned Europe as a global leader in AI governance, critics say it also slowed innovation, with startups warning that strict rules and documentation requirements made it difficult to compete with their U.S. and Chinese peers.
A Push to Catch Up
The new strategy is part of a broader effort by the European Union to reignite its technological competitiveness and stimulate industrial adoption of AI, an area where the bloc has been struggling.
According to data from the European Investment Bank, AI investment in the U.S. outpaces Europe’s by nearly five times, and China now produces the majority of the world’s AI patents. While American firms dominate generative AI and cloud infrastructure, Europe remains fragmented — lacking large-scale computing resources and unified industrial coordination.
To address these gaps, the Apply AI plan focuses on targeted industrial transformation, seeking to integrate AI tools into sectors that anchor Europe’s economy and employ millions of workers.
Target Sectors and Measures
The European Commission identified ten sectors where AI adoption will be accelerated: healthcare, pharmaceuticals, energy, mobility, manufacturing, construction, agri-food, defense, communications, and culture.
Under the plan, Europe will:
- Establish AI-powered medical screening centers to improve healthcare diagnostics and disease detection;
- Develop “agentic AI” systems — autonomous and adaptive models — for manufacturing, climate analysis, and drug development;
- Support AI-driven tools in renewable energy management, aimed at optimizing power grids and reducing emissions;
- Promote AI integration in agriculture and food production to enhance food security and resource efficiency.
The initiative will also connect startups with industry partners and research institutions to ensure that AI breakthroughs move quickly from the lab to real-world deployment.
Funding and Private Sector Role
The €1 billion funding will come primarily from the Horizon Europe and Digital Europe programs. The Commission expects member states and private investors to match the EU’s contribution, potentially doubling the total investment to around €2 billion.
The goal is not only to provide financial backing but also to stimulate private innovation ecosystems that can rival the scale of Silicon Valley or Shenzhen.
The push for AI independence aligns with the EU’s long-standing ambition for “strategic autonomy” — the ability to operate technologically and economically without overreliance on external powers.
In recent years, the bloc has found itself squeezed between the U.S. tech dominance and China’s rapid AI expansion, with both superpowers using AI to project global influence. European policymakers believe that building sovereign AI capabilities is now a matter of economic security as much as innovation.
Trade tensions with the United States — particularly over subsidies, data localization, and cloud computing access — have deepened the EU’s determination to invest in domestic AI infrastructure. At the same time, the bloc is cautious about Chinese AI systems, which raise security and ethical concerns over data privacy and state surveillance.
Europe’s challenge lies in balancing innovation with regulation. While the AI Act has been praised for setting global ethical standards, business leaders warn that overregulation could hinder the region’s ability to compete with the fast-moving ecosystems of the U.S. and China.
The Apply AI plan seeks to counter that perception by pairing strict oversight with tangible economic incentives. Brussels hopes the initiative will help rebuild investor confidence, attract top AI talent, and spur the next generation of European AI startups capable of competing globally.