Lagarde warns Europe faces AI dependency risk

European Central Bank President Christine Lagarde has warned that Europe faces an unprecedented risk of being cut off from artificial intelligence technology, urging the continent to become a producer of AI to preserve its autonomy and economic security. Speaking in Vienna on Monday, Lagarde said European firms are investing in AI but predominantly importing it from the United States, creating a dangerous dependency. Lagarde argued that AI will soon be integrated into critical economic functions, including screening goods at borders, auditing tax returns, dispatching trains, monitoring patients, and clearing bank payments. A withdrawal of access or a change in its terms would then affect every sector simultaneously, she said. "That is the kind of leverage no trade partner has ever held over Europe," Lagarde stated, noting it could be used in negotiations on tariffs or digital taxes. The ECB president highlighted that European savers are financing the US AI buildout while Europe's own infrastructure lags. She cited figures showing European households hold approximately €440 billion in US tech stocks, while roughly €300 billion in annual European savings flow to the United States.