Digital transformation. AI data. innovation and technology.
getty
French President Emmanuel Macron introduces AI. He is essentially saying that unless Europe competes at a higher level in AI, it will eventually become a colony of the United States or China.
In the old world of bilateral trade, the door was open for the United States to dominate Europe with Google, Microsoft, Netflix, and Disney. But now Trump has ruined much of that cooperation. Digital services are at risk of being weaponized. Rather, its weaponization is suddenly in focus.
Countries that desire sovereignty must be able to resist sanctions, restrictions, and weaponization of software. This is why there is no Google or Facebook in China, and why China has a government policy to phase out Microsoft as quickly as possible.
The United States pulled the rug out from under the world when it locked down Anthropic’s latest AI. It sent a very negative message.
After all, what is more important for a country in the long run: access to artificial intelligence or access to something as important as grain?
Currently, one is an irreplaceable monopoly and the other is not. One is essential to the wealth of a nation and its economy, the other is fungible.
There is no second place in intelligence, and there are no natural limits to requests.
That’s the important idea.
AI will artificially create more powerful nations and dominate their own kind. Spears versus rifles is not a strategy for the weak, nor is it a strategy that begs the likes of Trump.
Mr Macron has made that clear, and you can be sure the rest of the EU understands it.
So, here’s the rub.
Humans are limited by software.
Software is limited by hardware.
Hardware is energy constrained.
With this, Europe will be defeated in one blow.
Europe provides 50% of the electricity to 150% of its people, but compared to the US, it doesn’t have enough electricity to compete with AI. France is the only player in the EU with adequate powers and the ability to expand them quickly. And you know what? SoftBank has just committed billions of dollars to build AI there.
America, on the other hand, has the power and space to build…but wait.
China already has 2.5 times more power generation and is adding more at an incredible pace. It is building nuclear power at a fraction of the cost of Western countries. After all, the United States and the European Union have been pursuing nuclear programs in earnest for decades, even as their nuclear expertise has withered. China is already building the energy infrastructure that the United States dreams of, and Europe is only just beginning to recognize the need for it.
So catching China looks like a tall order.
America’s advantage lies in chips and software, but that moat is rapidly eroding. The money is probably there, but the US also has budget deficits, political divisions, and neo-Luddite resistance to AI, none of which is evident or tolerated in China.
The assumption is that American superiority is sufficient to keep America in the lead. However, technology is advancing much faster than infrastructure. The technology moat may disappear in a matter of months, but in a political system where a rare bird’s nest can halt power plant construction indefinitely, the energy gap may never be closed.
Musk talks about robots. Now China sells them. And they don’t wander around the office. They perform kung fu.
China can and will close the US software and hardware moat.
Can the US close China’s energy moat?
Macron said Europe has put about $600 million into Mistral AI, and the United States has invested about $600 billion in AI. He believes it is remarkable that an investment that represents only 0.1% of total US investment has achieved so much. But he also recognizes that it is not sustainable for European sovereignty to remain behind the AI collective.
From here, we can develop this analysis in two directions.
- America ended up not being able to build enough energy fast enough, or
- The United States and Europe will be building huge energy infrastructures just to catch up with China.
To me version 1 is much more attractive commercially – people love doom – but I think we’re going to see a massive reorientation towards energy.
That will happen soon, but if that effort doesn’t work out, we can all choose option 1.
But if it does not, the economic consequences will be enormous, including rapid growth, high inflation, and a long-term increase in economic and political instability for years to come.
Energy is the key to our future, and choosing AI over NS can lead to a brighter future.
NS?
Natural stupidity.
Unfortunately, there is no shortage of it.
