Computer & Communication Industry Association
PublishedMarch 21, 2024

Generative AI Thriving in Competitive EU Market, New Study Finds

Brussels, BELGIUM – The European market for generative artificial intelligence (AI) is highly competitive according to a new study, revealing a vibrant and dynamic landscape with many new market entrants, business models, and European success stories.

This timely study by Copenhagen Economics comes hot on the heels of various national competition authorities across the European Union announcing plans to examine competitive dynamics in the generative AI market. According to the authors, however, there are currently no competition issues in this market whatsoever that would warrant regulatory intervention.

The Computer & Communications Industry Association (CCIA Europe), which commissioned the independent study, stresses that any future competition-related concerns should be assessed within the context of the EU’s existing competition framework or the Digital Markets Act, rather than adding new layers to the regulatory framework for AI.

There are currently no barriers to entering Europe’s generative AI market – which entails a specific subtype of AI foundation models that are typically used to create new content such as text, audio, video, and computer code from scratch – according to the report.

In fact, the authors highlight the large and growing number of foundation model developers active in the EU, with many startups competing head-to-head with established players. Success stories also include leading European developers such as Mistral AI and Aleph Alpha.

Partnerships between generative AI developers and large digital players can be mutually beneficial, although they need to be assessed on an individual basis, CCIA Europe believes. The level of control a large player has over a startup should be at the heart of each assessment in order to avoid tie-ups leading to a merger-type situation or competition distortion.

Overall, Europe’s generative AI landscape is highly competitive and set to give the EU economy a considerable boost in the near future. That is why regulatory intervention would be premature, slowing down innovation, growth and reducing consumer choice in generative AI.

The following can be attributed to CCIA Europe’s Competition Policy Manager, Aleksandra Zuchowska:

“This new study shows that Europe’s market for generative AI is highly dynamic, and that concerns expressed by some competition authorities are not supported by market trends.”

“Allowing competition to flourish in the AI market will be more beneficial to European consumers than additional regulation prematurely being imposed, which would only stifle innovation and hinder new entrants.”

“Instead, the impact of new AI-specific rules, such as the EU’s recently adopted AI Act, needs to be closely monitored to avoid overburdening innovative AI developers with disproportionate compliance costs and unnecessary red tape.”