ECB’s Lagarde Says Europe Must Develop Its Own AI Capabilities

Europe risks leaving itself vulnerable if it relies on artificial intelligence models developed elsewhere, according to European Central Bank President Christine Lagarde.

“Europe needs to develop AI capabilities of its own, and be an indispensable part of the supply chain that ultimately produces AI, so that access to tools that are vital for its financial resilience does not depend on a switch controlled elsewhere,” she said in Frankfurt on Thursday.

The ECB chief and several of her Governing Council colleagues have repeatedly hit this theme before, warning that Europe can’t afford to fall too far behind the US.

“We have already seen what concentration risk can mean,” she said. “In the summer of 2024, one faulty software update grounded flights and disrupted banking services around the world.”

Speaking at a conference of the European Systemic Risk Board, which she chairs, Lagarde queried what happens in “a future in which almost every institution depends on a select few models or AI firms to adjust trading strategies or find vulnerabilities in their systems.”

“In that scenario, a loss of access could prove highly disruptive to financial stability,” she said.

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