Europe’s AI Challenge Runs Deeper Than Regulation

Europe Faces Barriers No Legal Rewrite Can Fix Pam Baker • December 19, 2025

An assumption propelling a proposed recalibration of European tech regulation is that red tape is holding back the trading bloc from gaining ground in a global race for artificial intelligence dominated by the United States and China.

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Backers of the "Digital Omnibus" proposal unveiled in Brussels last month hope that inserting a lighter touch here and a few delayed obligations into the continent's many tech laws will allow European developers to accelerate their efforts.

European firms may welcome a lessening of their regulatory burden. But Europe's problem isn’t merely regulatory drag. There's the structural gulf between what modern AI development requires and what Europe currently has the capacity to deliver. The Omnibus, helpful as it may be for legal alignment ...