USA dominates AI race

The United States is clearly leading the global race for artificial intelligence. Europe follows just ahead of China, but despite their technological, industrial and scientific strengths, both economies are currently unable to keep pace with the economic dynamism of the USA. This is shown by a study conducted by KPMG in Germany in collaboration with the German AI Association, for which over 900 decision-makers from business, technology and politics worldwide were surveyed and extensive data analyzed.

The analysis is based on the Strategic AI Capability Index (SACI), which KPMG developed in collaboration with the economic research institute Oxford Economics. It measures the extent to which AI is already being used in the economy, how sustainable the political and legal framework is and how well research, specialists and training are positioned in the national economies.

In the overall result, the USA is clearly in the lead with 75.2 points on a scale of zero to 100. The lead is due to the rapid and widespread use of AI in companies. Liquid capital markets and broad access to computing capacity enable companies to transfer AI use cases from the experimental phase to operations more quickly. The broad economic use also meets a good research landscape with many well-trained talents. All in all, the USA has a strong infrastructure that allows the use of AI to be scaled up quickly and efficiently.

US supremacy

The USA's leading role in the field of artificial intelligence is no coincidence. It is based on the close interplay between investment, research and application. In the AI economy, advantages are amplified very quickly: those who scale early gain structural advantages that are almost impossible to catch up on later. Europe's and Germany's competitiveness will depend on how consistently they learn from these experiences in order to bring AI to the wider economy more quickly. Three key levers are crucial here: access to growth capital, competitive energy prices and sufficient computing power.

“Europe's demand for responsible and ethical AI must not become an obstacle to operational use and international cooperation.”

Ashish Madan,
CTO, Head of Technology Services, KPMG

Europe achieved an overall score of 48.8 points, putting it well behind the USA. The continent has a strong industrial base in certain sectors, with expertise particularly in regulation, governance and individual areas of research. However, these have so far only had a limited economic impact in isolation. The introduction of AI in companies is progressing more slowly, with many applications stuck in the pilot stage. High energy prices, limited computing power and fragmented capital markets are making AI scaling more difficult.

China achieved an overall score of 48.2 points, putting it just behind Europe. The country has pronounced industrial strengths, a high level of patent activity and extensive control over central hardware components. Nevertheless, AI has so far only been used to a limited extent in the economy. Many companies use AI selectively, meaning that productivity gains remain rare. Low international networking also makes it difficult to scale up AI and share knowledge.

The index shows considerable differences within Europe. The UK and Ireland achieve the highest score of 69.2 points and come closest to the US level. The region benefits from high investment momentum, good access to capital and a comparatively rapid implementation of AI in companies. Western Europe follows with 57.1 points, while the DACH region is slightly lower at 54 points. Both regions have strong industrial and research structures, but are only making gradual progress in terms of scaling and productivity gains. Northern, Southern, Central and Eastern Europe are falling further behind. Northern Europe achieves 41.3 points and is therefore in the lower midfield. Southern Europe with 26.3 points and Central and Eastern Europe with 28.8 points are significantly weaker.

Potential for improvement in Europe

The results clearly show that Europe must strengthen its technological competitiveness and sovereignty. The AI race is not just about innovation and speed, but also about sovereignty. This is not achieved through isolation, but through its own competencies. Our analysis shows that the development of our own central AI capabilities, the reduction of technological dependencies and openness to international cooperation should be considered together. The balancing act is crucial: Europe's demand for responsible and ethical AI must not become an obstacle to operational use and international cooperation, but must accelerate both. (Source: KPMG)