Europe Warns of AI Dependency Crisis as Compute Gap Widens, Lagarde Calls for Continental Strategy

European Central Bank President Christine Lagarde warned that Europe faces a critical juncture in artificial intelligence development, urging the continent to build indigenous AI capabilities to avoid dangerous dependency on foreign systems. Speaking in early October, Lagarde cautioned that reliance on external AI models creates vulnerabilities across European industries and threatens financial stability, stating that "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."