In practice, however, it has failed to deliver the promised scale of operational infrastructure. European cloud providers hold only a small share of the continental market, and this share is shrinking rather than growing.
Closing this gap would require sustained, coordinated investment on a scale that is not currently politically feasible at the EU level.
Asia’s hardware advantage, Europe’s structural weakness
Outside the US and China, several Asian economies have identified clear entry points into the AI economy, with South Korea and Taiwan the most prominent examples.
The boom in AI chips has propelled Taiwan and South Korea ahead of the United Kingdom in global market rankings.
This development is driven by companies at the heart of AI infrastructure: Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip manufacturer, and South Korea’s Samsung Electronics and SK Hynix, which dominate key memory markets.
TSMC is now one of the world’s largest companies, with a market capitalisation of approximately US$1.8 trillion. Samsung and SK Hynix together have a combined market capitalisation of around US$1.5 trillion.
For comparison, the combined market value of all technology stocks in the Stoxx Europe 600 Index is about US$1.4 trillion.
Asia is benefiting from the hardware foundations of the AI revolution, while Europe remains more focused on regulation, financial services, and fragmented digital initiatives.
This is where middle powers become important. No single middle power can realistically replicate the full AI stack of the United States or China. However, they can combine complementary strengths, such as energy, geography, hardware, talent, industrial applications, and market access.
Electricity prices in Türkiye are roughly a quarter of the European average. As electricity is one of the most significant cost factors for data centres, Türkiye is a leading potential location for data centre investments.
The AI gap is not just an economic problem; it’s also a security issue. If the US or China were to deny a country access to AI systems hosted on their territory today, the immediate consequences might still be limited.
Most hospitals, military systems, power grids, and public services are not yet fully dependent on cutting-edge AI.
But that will change. As AI becomes more deeply embedded across critical infrastructure, defence systems, logistics, finance, healthcare, and public administration, reliance on foreign AI platforms will become a strategic vulnerability.
Both the United States and China have already demonstrated, in other areas, their willingness to use technological and economic dependencies as leverage. There is no reason to believe AI will be any different.
Therefore, data centers, cloud infrastructure, and energy policy have become matters of national strategy. Countries that do not control a significant share of the AI infrastructure could find their political room for manoeuvre restricted in the future by those that do.
The concentration of AI power in the United States and China poses a long-term strategic challenge for Europe and other middle powers.
Asia, particularly South Korea and Taiwan, has capitalised on opportunities through its hardware and semiconductor ecosystems. Europe, by contrast, risks falling behind because of high energy costs, weak commercialisation, fragmented cloud infrastructure, and over-reliance on regulation.
The gap between the US-China AI axis and the rest of the world is widening.
If middle powers fail to coordinate their strategies across energy, computing power, hardware, talent, and capital, the AI divide will become a permanent structure of technological dependency.
