Is War Europe’s Last Hope for the Technology Sector?
It is a widely acknowledged fact that Europe has fallen behind in technological advancement. The United States and China lead the field of artificial intelligence. In cloud services, American web-scalers dominate with more than 70% of the European market, while European providers hold only around 13–15%.
The same bleak picture can be seen across most of the technology landscape. In infrastructure, global giants such as NVIDIA, TSMC, Intel, and AMD have moved far ahead. Europe’s last true high-tech champion, ASML of the Netherlands, specializes in lithography technology that enables the semiconductor industry to function.
Investment capital is simply not flowing into European tech at the scale needed to compete. For example, the French AI company Mistral AI raised an impressive €1.7 billion, yet this pales in comparison to the estimated $200 billion in AI venture funding projected for the United States this year alone.
At a recent conference, I listened to Mario Giannini, the former CEO of Hamilton Lane, which manages approximately one trillion dollars in private market investments. His analysis was blunt: The U.S. and China are so far ahead that Europe will not catch up. Europe offers nothing that these two nations don’t already have — and therefore, in his view, Europe is not worth investing in.
However, I believe Europe does have something unique — something that neither the U.S. nor Asia currently possesses: a modern war.
Throughout human history, war has often been a catalyst for technological leaps. The last large-scale conflict where both sides applied cutting-edge technology equally was World War II. During that period, technological progress surged across multiple domains — atomic energy, aerodynamics, jet propulsion, rocketry, and computing, to name a few. These innovations later fueled new industries and corporate giants, profoundly impacting the civilian economy and global growth.
Today, Europe once again has both the opportunity and the obligation to invest in and develop defense technology — not only to defend its values, but also because no single global power yet dominates many of the technologies being advanced in the context of the war in Ukraine.
Key domains of emerging defense innovation include:
Autonomous ground and aerial systems
Sensor technologies
Swarm intelligence
Disruption-resistant communications
Image and pattern recognition
Nanotechnology
The civilian applications of these technologies could become the foundation for the next wave of European economic growth.
While I largely agree with Giannini’s assessment, I disagree with his conclusion that Europe offers no viable investment targets. In fact, defense technology may well become the spark that reignites Europe’s technological renaissance.
