AI competitiveness: How the EU compares to the US and China

One central aspect, for example, is Europe’s failure to translate innovation into commercialisation, allowing an innovation gap to persist with the US and China, especially in advanced technologies. As a result of the Draghi Report, the EU developed its Competitiveness Compass (European Commission, 2025a). This covers three necessities for the EU to boost its competitiveness, one of which is to close the innovation gap by helping companies adopt new technologies such as AI. This has in turn led to the EU AI Factories Initiative (European Commission, 2025b), among other initiatives, which aims to create AI clusters that combine research, large computing capacity and entrepreneurial application at various locations in Europe.

AI is important to help companies in Europe increase their competitiveness, as AI can be a key driver for enhancing productivity (Aldasoro et al., 2026). Furthermore, implementing AI tools and applications can help companies reduce costs, develop innovative products and services, and counteract the shortage of skilled workers. The aim of this fact sheet is to examine the EU’s performance in terms of AI competitiveness compared to the US and China as its main global competitors.

AI is multi-layered, therefore AI competitiveness affects many areas. For example, AI usage requires the persons using the technology to be digitally literate. However, in 2025, only 60% of Europeans have basic digital skills (Eurostat, 2025), while the European Commission’s target under the Digital Compass for 2030 is 80% (European Commission, 2021). Furthermore, it is important for AI competitiveness that sufficient infrastructure is in place, that AI is developed and applied in a variety of ways, and that society is open to AI. The multi-layered structure first requires the identification of key factors influencing AI competitiveness so that a comprehensive analysis can be conducted.

For each component, the analysis below provides up to three indicators that are relevant and complete in the sense that they contain current data for the EU, the US and China. Each category is accompanied by a brief key takeaway.