Europe lags and regulation shifts: 3 calls for AI

We have heard it often enough: the US innovates, China replicates and Europe regulates. Our risky call is that, in its broader efforts to support growth and competitiveness in Europe, the European Commission will propose a big deregulation package for AI, which would then be approved by governments and the European Parliament.

Parts of this package could allow European companies to train models better and more easily. Consequently, European companies will become slightly less dependent on AI made in the US and AI investments will finally start to accelerate in Europe, positively impacting total investments in Europe in 2026. Nevertheless, this will not enable Europe to catch up with the United States, nor will it bridge the structural gap in potential growth.

We won’t speculate on stock market trends or whether an AI bubble is forming, but regardless of market moves, our bold call is that investor enthusiasm for AI will fade in 2026. It will follow the so-called “Gartner Hype Cycle” where a new technology moves from initial excitement to a peak of inflated expectations, then through a period of disappointment, before reaching a stage of practical understanding and finally becoming widely adopted and productive.

For AI, 2026 could mark the peak of inflated expectations, as investments fail to deliver on promises and major model errors prompt a return to human judgment – forcing companies to rethink how they use and apply AI. Power outages or cooling issues, as experienced by the Chicago Mercantile Exchange in late November, for example, create more uncertainty regarding the use of AI. As a result, 2026 becomes a year of consolidation or even a setback for the global AI wave.