The Age of Artificial Intelligence

This chapter investigates the European reaction to the significant advancements in AI that have captivated public interest, particularly highlighted by the release of ChatGPT. It analyses the EU’s AI Act, which addresses the risks associated with AI technologies by establishing product safety regulations. Despite the EU’s ambitious goals to increase AI investment, progress has fallen short of expectations. Europe struggles to keep pace with US firms in the AI domain. European AI companies predominantly rely on fine-tuning existing GenAI models, indicating a shift towards a platform-based AI market with significant network effects. However, the narrative acknowledges the hefty data and computational demands of the prevailing transformer models, urging the pursuit of innovative approaches. This could represent a strategic opening for Europe. The chapter notes the global efforts to regulate AI, with tech companies and international organisations contributing to the discourse. It highlights a discrepancy between regulatory anxieties and AI’s practical impacts, suggesting the need for a nuanced understanding of its societal implications. The text discusses AI’s potential effects on employment and productivity, cautioning against overestimating its immediate macroeconomic impact.