Europe is at an AI crossroads. Despite ambitions for industrial renewal, productivity, and competitiveness, the continent's enterprises lag US peers in AI adoption, with 56% of 800 large European companies surveyed in 2025 yet to scale a major AI investment. Closing that gap could add nearly €200 billion to annual business revenues, according to Accenture. But the harder problem is structural: a looming infrastructure shortfall, energy grid constraints, and a compliance-led posture that slows execution. This EMIR Intelligence report, supported by Core42, examines what Europe can learn from a country that has solved many of these problems already, the United Arab Emirates.
The report opens by diagnosing Europe's AI deficit. The average European worker now produces only 76% of what a US counterpart produces per hour, and AI is the technology most likely to close that gap. Yet European firms invest less than US peers, contend with legacy data fragmentation, and operate under a comprehensive AI Act that imposes costs before tools reach production. Above all sits a problem of commitment, a failure to recognise the unique opportunity AI represents and to reshape economies around it.
It then turns to the looming infrastructure challenge. JP Morgan forecasts $5 trillion of investment in data centres over the next five years to meet global AI demand, with power generation as the binding constraint on where capacity gets built. Europe's ageing grids, high power prices, and renewable transition make the continent a difficult home for hyperscale buildout. In Ireland, data centres already account for more than a fifth of total power demand, and global tech firms are now under pressure to generate energy on-site rather than rely on the grid.
The UAE shows what is possible when a state mobilises behind AI. The country now ranks second globally for total AI compute capacity at 23.1 million H100 equivalents, behind only the US at 39.7 million, and sits in the top five of Stanford's Global AI Vibrancy index. A combination of empty desert, abundant low-cost energy, and early government commitment drew hyperscaler investment and enabled homegrown sovereign AI offerings, including Core42's AI Cloud, which combines access to NVIDIA, AMD, Cerebras, and Qualcomm accelerators with full data and workflow control. This has unlocked AI adoption in regulated sectors like energy and healthcare without requiring a comprehensive EU-style AI Act, because compliance is guaranteed by localisation.
The report closes with three recommendations for Europe: protect technological sovereignty by aligning EU governments, energy companies, and global tech firms to overcome grid and land use constraints; develop sovereign offerings, potentially through co-investments with experienced Gulf providers already expanding into Germany and France with next-generation data centres in Grenoble; and form intra-sector compacts where energy, health, and telecom leaders align on shared standards for sovereign AI ecosystems. The next two to three years will determine whether Europe builds the sovereign infrastructure to unlock an AI-enabled productivity surge, or drifts into dependency on external computing capacity and platforms.
