The U.S. economy has grown at nearly double the rate of the EU economy over the past 10 years. Per capita U.S. gross domestic product is now around 85% higher than the European Union average. U.S. GDP now stands at $32.5 trillion, and EU GDP at just below $23.1 trillion.
In 2008, excluding the United Kingdom from the EU calculation (the U.K. left the EU in 2020), the two economies were roughly equal in size. This economic divergence is a function of U.S. productivity growth, America’s reliable access to generally cheap energy, and its technology sector dominance. But it ultimately reflects the American capitalist model’s superior service of human interests over the socialist-lite EU model.
You’d expect EU leaders to want to do all they could to learn from the American experience. But that would require common sense. Instead, the EU’s new artificial intelligence regulation suggests that the political union wants only to help America widen its economic lead.
As Politico reports, the regulation will require AI-powered data centers to display a graded measure of their water usage, energy efficiency, and clean energy usage. While smaller data centers will be excluded from mandatory reporting to start, EU Energy Commissioner Dan Jorgensen told Politico that “later we are also going to introduce minimum performance standards which, of course, will put more pressure on those who may not voluntarily wish to be as sustainable as we want them to.” Politico notes that the EU is “expected to tighten the screws by setting mandatory sustainability thresholds for newly built or retrofitted data centers.”
Considering that the EU already has a severe deficit of data centers, this new rule really isn’t very clever.
But in a further textbook example of the EU’s business mentality delusion, Jorgensen (who was a university lecturer on the environment before becoming a left-wing politician in Denmark) says his “overall message to the Big Tech sector is: We want AI, of course, we want data centers, we want Europe to be a place for investments, but it’s in the interest of them and of the European Union that we do it in a way that is sustainable. And we will be setting demands for them.”
Facing this insipid arrogance and the EU’s already crisis-level lack of computing power, one imagines AI developers might quickly respond, “We’ll be off to America, then.” It’s not just that this regulation is distinctly anti-growth per se. It’s how it underlines the EU’s view of the technology industry as something to be restrained rather than empowered.
And this is only the tip of the iceberg.
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It follows the EU’s constant extortion of American technology giants, for example. But it also joins the EU’s AI Act, which was introduced in 2024. By imposing heavy regulatory burdens on AI developers, this act has deterred both start-ups and existing AI giants from investing in the EU. Facing the existing infrastructure and vast capital investment opportunities offered by the U.S. market, the EU should have fixated on providing an AI ease-of-doing-business model. Instead, it has done the opposite.
EU bureaucrats and politicians may toast themselves for knowing what’s best, but Europeans will bear the economic burden of their folly.