Europe is at a crossroads: compete effectively in the Artificial Intelligence race or stick to its world-leading climate goals.
“It’s a divisive moment for Europe,” said Dan Ives of Wedbush Securities. on CNBC.Europe can either “play in the future” or risk “missing a large part of this technological wave”.
The dilemma is exacerbated by Europe's mandates for green energy.
Globally, energy is the biggest obstacle to building AI data centers. While the US is commissioning fossil fuel plants to fuel their growth, Europe is requiring developers to implement energy and water efficiency measures, adding red tape that can slow down the start of projects.
The European Union is often praised for its environmental policies and has made progress with new mechanisms such as the upcoming carbon tax. But some critics say it is hindering business. The continent is seen as “anti-business,” Ives said, which is pushing European tech names and startups to move to the United States, the Middle East or Asia in search of more favorable policies.
As Europe tries to catch up in the AI race, the need for energy-intensive infrastructure is growing, the demand for electricity is increasing and this cannot be ignored. Renewable energy sources were intended to replace the most polluting sources, but now there are concerns that this will all turn out differently.
“You can see in the UK that we are already backing down on some of our commitments,” Paul Jackson, regional global market strategist at Invesco, told CNBC – and Europe will likely follow suit.
The phase-out of fossil fuels as renewables come on stream only works when energy demand is constant. This can no longer be the case because data centers require constant connectivity, so intermittent wind and solar power could prove fatal.
On December 16, the EU moved up a ban on new combustion engine cars to 2035. On December 9, it approved a one-year delay in the implementation of a new EU emissions system for buildings, road transport and small industries – although it also pledged to cut emissions by 90% by 2040.
Earlier this year, the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD ) were curtailed and postponed.
Some welcome these moves and describe them as necessary and realistic rather than a retreat.
Proponents of AI tout the technology's ability to make energy systems more efficient and to enhance sustainability. They thus recognize it as both a problem and a solution, and propose it as a worthwhile investment.
Although the press releases will range from very select to rare, I said I'd pass...because sometimes the editors hide.
