Issue #8 - October 8, 2025

The EU Apply AI Strategy: an ill-thought solution to a real problem?

The European Commission has unveiled a plan to accelerate AI adoption across EU industries. The reality of how AI is being implemented into the industrial ecosystem can cause headaches for policymakers. 13.5% of EU enterprises with 10+ employees use AI (2024), up from 8% in 2023. But at the same time, we can argue that if AI isn't adopted as much as policymakers would like to see, individual users seem to have found in ChatGPT and other tools an opportunity to do their job faster, and when well used, smarter. This shows that adoption is real, it's just that companies are slower to move. Is it because of regulatory uncertainty, compliance risks (copyright, etc.), lack of trust in the models? A mix of all of this, it seems. Real breakthroughs in AI adoption will likely come from greater capacity and willingness to invest. It would be foolish to believe that companies haven't realised the AI revolution is a potential existential risk to many businesses. A recent study led by KPMG, a consulting firm, confirms investment in AI is at the top of CEO’s minds. The question then is how to create the incentives to invest, and how to do it where it matters? The automotive industry, the largest sector investing in R&D in Europe, has somehow heavily missed the autonomous vehicle revolution. It might not be an issue today since these vehicles are not even allowed to hit the EU roads, but it might become one tomorrow when the US (Alphabet/Waymo, Amazon/Zoox), and Chinese (Baidu, Pony.ai, WeRide, AutoX) leaders in this sector will knock at the EU door, still occupied with creating a so-called strategic autonomy.

The 28th regime and the Innovation Act: the EU's plan for competitiveness that will require heavy political support

Last week, the European Commission closed its public consultation on the 28th regime and Innovation Act, the two files that come straight from the recommendations of Enrico Letta and Mario Draghi made ahead of the European elections last year. The consultations were aimed at collecting insights from industry and innovation thought leaders about the direction of travel of the two files. The 28th regime consists of the idea of creating an additional virtual member state with a single harmonised legal regime for companies instead of 27, and harmonized reporting rules. The Innovation Act aims to cut red tape and create a simpler, more innovation-friendly regulatory environment. Among the respondents to the consultation, Index Ventures, a VC, argues the 28th regime should include a harmonised regime for employee stock options, a key driver of global attractiveness for tech companies. The CEA, a leading research institute based in France, suggests creating European thematic accelerators, modeled after SiliconCatalyst or InnoEnergy, and facilitating access for innovative actors to the complete continuum of financing (equity, loans, grants, public procurement). EU Inc, a grassroots initiative, has gathered hundreds of EU companies to push for a detailed proposition. Beyond the question of creating a single corporate regime and a harmonised set of rules, the level of political ambition to strategically position innovation at the core of the European project remains to be seen. The 5th freedom of innovation suggested by Enrico Letta would arguably represent the necessary step to enable it.