- Economic Acceleration: Massive capital investment in artificial intelligence currently serves as a primary engine for American gross domestic product growth.
- Geopolitical Competition: The United States and China are engaged in a critical race for global technological supremacy, with AI acting as a decisive factor in national security.
- The Great Divergence: Nations that successfully invest in AI infrastructure will likely gain permanent economic and military advantages over those that fail to do so.
- Energy Constraints: European reliance on intermittent renewables has led to deindustrialization and energy costs that are fundamentally incompatible with the power requirements of an AI-driven economy.
- Regulatory Overreach: Excessive legislative frameworks, including the EU AI Act, impose prohibitive compliance costs that stifle innovation and drive technology companies out of the European market.
- Market Barriers: Complex, duplicative regulations disadvantage newer firms by effectively preventing them from scaling due to the high costs of legal compliance.
- Growth Centric Strategy: Successful participation in the global AI economy requires a shift toward deregulation and a pragmatic embrace of expanded energy production.
- Strategic Partnership: The European Union must adopt a pro-growth model to integrate effectively with the American-led technological architecture rather than pursuing isolationist regulatory policies.
By
Andy Puzder
and
Jacob Helberg
March 23, 2026 5:36 pm ET
BPC > Only use to renew if text is incomplete or updated: | archive.vn
BPC > Full article text fetched from (no need to report issue for external site): | archive.today | archive.fo

Robots in the production facility of X-Humanoid in Beijing, March 20. Kevin Frayer/Getty Images
An economy that waits for the artificial-intelligence surge will likely miss it. Unprecedented AI capital spending in the U.S. is already a significant driver of gross domestic product, challenging consumer spending as the dominant engine of economic growth. American companies are spending as if it’s the Industrial Revolution, and for good reason: The West is in a race with China to achieve AI supremacy, and we need to win. But European policy missteps threaten the West’s chances—and Europe’s future security and economic growth.
A recent report from the White House Council of Economic Advisers, “Artificial Intelligence and the Great Divergence,” makes the case for AI innovation. The term “Great Divergence” originally referred to an economic gap that arose during the Industrial Revolution. Countries that industrialized, prospered; those that failed to industrialize, floundered. AI has the potential to create a second Great Divergence, between countries that invest in AI technology and infrastructure and those that don’t.
Beyond its economic implications, AI will have national-security consequences, shaping who wins conflicts and whose vision of global order prevails. The intelligence, logistics and decision-making advantages that AI systems confer will deliver near-term military gains and compounding advantages that endure far into the future.
The U.S. remains ahead in this race, and President Trump is focused on winning. But China is close behind. Europe has the talent, companies and capital to be an important partner, but unlocking that potential requires European Union regulators to choose growth and innovation over stagnation and strangulation across energy, permitting and AI regulation.
Europe needs abundant, affordable energy. For years, Europeans have invested in the belief that solar and wind energy could power industrial might. The result so far has been deindustrialization and high energy costs. As Europe begins to grapple with its need for greater growth, the question is whether its current energy policy can support necessary reindustrialization while meeting the massive power demands of a burgeoning AI economy. Given that Europe’s total electricity generation has fallen over the past two decades, the answer is an unequivocal no. To join the AI economy, the EU must embrace energy addition rather than energy transition, rejecting policies that increase the cost and limit the use of fossil fuels.
The EU also needs to build. It needs data centers and access to the American AI hardware stack. Companies with the resources to build multibillion-dollar AI infrastructure already operate in Europe, employing thousands of Europeans. They are willing to invest and grow, bringing Europe into the AI economy as a full partner. But the EU’s onerous regulations stifle these ambitions, often driving companies out of Europe entirely.
To keep them in Europe, the EU needs to deregulate quickly and ambitiously. The EU Artificial Intelligence Act, the Digital Services Act, the Digital Markets Act, the Data Act and the Cyber Resilience Act, among others, impose stringent and duplicative regulations that stifle innovation, drive up compliance costs, delay product launches, restrict access to data, and expose companies to billions in fines.
Before AI systems are even put on the market, the AI Act alone requires predeployment risk assessments and mitigation systems, high-quality data sets, detailed logs, documentation of system functionality, and human oversight. Many of these requirements are impractical for frontier AI development. They are less a safety framework than a blueprint for driving innovation out of Europe.
The act erects massive barriers to entry to the market. Mistral AI CEO Arthur Mensch, who heads Europe’s most prominent homegrown AI company, argues that the act “effectively solidifies the existence of two categories of companies: those with the right to scale . . . and those that can’t because they lack an army of lawyers, i.e., the newcomers.” Mr. Mensch argues that the AI Act should have focused on product safety for specific high-risk applications such as healthcare instead of regulating foundation models.
If the EU doesn’t change course, the U.S. could leave Europe behind—an undesirable outcome for America and our European partners. Europe would be disarmed economically and militarily, and we would be without powerful allies in a race against Chinese dominance. America is pursuing a pragmatic, growth-centric approach to AI. The U.S. 2025 AI Action Plan is based on three pillars: “innovation, infrastructure, and international diplomacy and security.” It acknowledges that American regulatory structures must encourage rapid and comprehensive innovation in developing and distributing AI technology.
Europe can play in that architecture—but it must show up as a genuine partner. The State Department’s Pax Silica initiative is building the network the AI race requires, knitting together energy, critical minerals, semiconductor manufacturing and computing capacity across trusted nations. The EU’s talent, capital and industrial base belong in that network.
Europe can join the U.S. and other AI-first economies, or it can continue regulating its way into irrelevance. We hope it will join.
Mr. Puzder is U.S. ambassador to the European Union. Mr. Helberg is undersecretary of state for economic growth, energy and the environment.
Free Expression: A Daily Newsletter From WSJ Opinion
Opinion | Chuck Norris Is Still Undefeated
Opinion | To Bury, Not to Praise
Opinion | Will the Real James Fishback Please Stand Up?
Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Already a subscriber? Sign In
About Free Expression


How I Stop AI From Telling Me What I Want to Hear
AI Is Rewriting the Old Rules of Google Search and SEO
How Much Do You Know About Rare Earths? Test Yourself With This Quiz
Why You Should Let AI Write Your Next Customer Complaint
The E-Nose Knows: AI Learns to Smell
The Unexpected Risk of Letting ChatGPT Fact-Check Your Financial Adviser
I Finally Have a Physician Who’s Available and Who Gets Me. Meet Dr. Grok.
It’s Easier to Cheat When You Can Blame AI
OpenAI’s Bid to Allow X-Rated Talk Is Freaking Out Its Own Advisers
AI Isn’t Lightening Workloads. It’s Making Them More Intense.
Anthropic’s Standoff With the Pentagon Shakes Up AI Talent Race
AI Needs Management Consultants After All