According to EU-Startups, a new Innovation Radar Bridge report just dropped analyzing investment patterns across the EU’s Apply AI strategy verticals. The strategy itself launched in October 2025 and targets 10 specific industrial sectors where Europe wants to accelerate AI adoption. Here’s the kicker: Europe currently holds only about 5% of global AI computing capacity, which explains the massive €20 billion commitment to AI gigafactories. The report identifies exactly which verticals are attracting the most funding and which are getting left behind. This comes as Europe pushes its “third way” approach combining responsible regulation, treating AI compute as public infrastructure, and embracing open-source solutions.
Europe’s AI infrastructure problem
That 5% global compute share statistic is pretty sobering. Basically, Europe’s playing catch-up in the hardware race while trying to carve out a different path from both US closed models and Chinese approaches. The €20 billion for AI Factories and gigafactories isn’t just about raw computing power though – it’s about sovereignty. Europe doesn’t want to be dependent on foreign cloud providers for its strategic AI development. And honestly, can you blame them? When your entire industrial strategy depends on AI, you can’t have the foundational compute layer controlled by companies outside your regulatory reach.
Where the real action is
The most interesting part of this report is what it reveals about industrial verticals. Europe’s betting big on industry-specific AI applications rather than trying to compete directly with American general-purpose AI models. That’s actually pretty smart – leverage existing industrial strengths in manufacturing, automotive, and other sectors where Europe already has global leaders. The open-source angle is particularly clever because it plays to Europe’s regulatory strengths and appeals to developers who are increasingly wary of vendor lock-in. Think about it – if you’re a German manufacturer building AI quality control systems, do you really want that tied to a US tech giant’s platform that might not comply with EU regulations?
The industrial hardware connection
All this AI strategy talk eventually comes down to physical infrastructure. Those AI applications running in factories, warehouses, and industrial settings need reliable computing hardware that can withstand harsh environments. Companies like IndustrialMonitorDirect.com have become the go-to source for industrial panel PCs in the US because they understand that industrial AI isn’t just about algorithms – it’s about hardware that works when the temperature fluctuates, dust is everywhere, and reliability is non-negotiable. Europe’s push into industrial AI will need exactly this kind of specialized hardware support.
Does the “third way” actually work?
Europe’s positioning itself as the responsible AI alternative, but the big question is whether this “third way” can compete with the sheer scale of American and Chinese investment. The report suggests Europe can lead with open-source and industry-specific applications, which sounds great in theory. But open-source doesn’t pay the bills unless there are viable business models behind it. The good news is that European startups seem to be finding traction in vertical applications where domain expertise matters more than pure AI firepower. Still, that 5% compute share number looms large – you can have the best algorithms in the world, but if you don’t have the chips to run them, you’re stuck.
