200 billion challenges: AI, deregulation and the future of Europe

The European Commission announces a maxi-fund for artificial intelligence while U.S. policy pushes deregulation and Mario Draghi warns of the risk of stifling bureaucracy. In this new episode of Diritto al Digitale, Giulio Coraggio from DLA Piper reveals how Europe can balance the desire to innovate with the imperative to protect fundamental rights at a time when digital transformation runs faster than the rules. Will the EU be able to seize this opportunity without being bridled by its own bureaucracy?

📌 You can find our contacts 👉 www.dlapiper.com

Transcript

What happens when one of the world’s biggest powers decides to fully unleash innovation by minimizing regulatory barriers, while on the other side of the ocean an entire Union debates how to ensure technological growth without compromising fundamental rights?

If you guessed the United States on one side and the European Union on the other, you’re on the right track. But here’s the real question: can Europe—armed with a 200-billion-euro investment in AI—hold its own on the global stage without getting bogged down in suffocating bureaucracy?

Welcome to “Diritto al Digitale,” the podcast exploring how technology and law intersect. I’m Giulio Coraggio, a lawyer at DLA Piper specializing in emerging technologies and data.

In this episode, we’ll talk about how the push toward deregulation—partly inspired by the former (and newly elected) President of the United States, Donald Trump—and Mario Draghi’s reflections on the GDPR’s potential hindrance could reshape global competitiveness. All this while the European Commission is rolling out a 200-billion-euro plan for AI—yet also announcing that there will be “no new regulation” for innovation in the next five years.

From the United States, we often hear about drastic cuts to rules and procedures, based on the idea that fewer bureaucratic hurdles mean more investment, more competition, and more jobs. The Trump presidency was a clear example: maximum freedom for businesses, especially in tech. On the other side, the European Union has built a strong regulatory framework over the years, with the GDPR becoming a global model for personal data protection, followed by the AI Act and the wider “digital decade” package of regulations.

However, what initially looked like the EU’s flagship achievement—strong protection of individual rights—has raised concerns: some believe that this emphasis on privacy and security might slow down innovation, especially in areas like AI, where data is the lifeblood of research and development.

Mario Draghi—an influential figure in European political and economic balance—has openly expressed concern that the GDPR and other regulations could become a bottleneck for European companies. In fact, various reports show that local startups, and European ones in general, struggle with the lack of flexibility compared to their American and Chinese competitors.

Recent data suggests that EU-based companies still make limited use of artificial intelligence and that the Union suffers a 30% GDP gap compared to the United States, partly due to slower adoption of new technologies.

To bridge this gap, the European Commission has put 200 billion euros on the table for AI development—an investment that many experts believe could become a real catalyst for Europe’s digital economy, boosting the creation of high-level technological infrastructures, data lakes, and cutting-edge research centers.

At the same time, there’s debate on how these funds will be put to work: Will accessing them involve overly complicated procedures, or will we manage to turn them quickly into solutions, innovative startups, and patents that can compete on a global scale?

It also raises questions about whether the EU might be sending mixed signals. Allocating 200 billion euros to AI doesn’t exactly align with regulations that restrict its use. For example, the GDPR limits “legitimate interest” as a legal basis for data processing in AI training, and recent guidelines from the European Data Protection Board haven’t offered much clarity.

It’s up to legislators or authorities to strike the right balance between legal compliance and business needs. Perhaps they should adopt a less rigid, more entrepreneurial approach in the national interest, as is often done in English-speaking countries. After all, lawmakers can’t keep up with technological innovation, so if authorities don’t step in, we risk a dead end.

In this scenario, companies that want to innovate may have to take risks, which is why we help our clients find the best solutions that are legally sustainable and still meet business goals. Taking risks without any form of legal protection, even if only partial, simply doesn’t make sense.

In this context, a potentially good piece of news made headlines, delivered by Robert Viola, Director-General of DG Connect at the European Commission. During a conference in Brussels, he declared: “No new regulation coming from DG Connect in the next five years.” It was a surprising announcement, met with a mix of relief and skepticism. Some see it as a welcome “breather” for European businesses, allowing them to experiment without the fear of ever-tighter rules. Others worry that this lack of specific regulation will create a digital wild west, particularly in sensitive areas like generative AI, biometrics, or cybersecurity—made more pressing by the war in Ukraine, which has brought digital defense to the forefront: cyberattacks, protecting critical infrastructure, and the use of drones and AI in military settings. All this adds another layer of complexity, because security is now a priority, and some countries fear that fewer regulations could weaken it.

Despite the uncertainties, the promise of a five-year window without new regulations from DG Connect could be a golden opportunity for European businesses. Analysts suggest that if the Commission sticks to this plan, companies and startups might:

• Accelerate their adoption of new technologies, without worrying about unexpected regulatory shifts.
 • Collaborate with governments on experimental projects (sandboxes) where AI applications can be tested in controlled environments.
 • Leverage the 200-billion-euro budget by investing in talent, computing infrastructures, and data sharing to remain competitive.

Looking ahead, the biggest question is whether Europe can strike the right balance between safeguarding rights, ensuring security, and allowing free technological development. At a time when the United States and China are pouring huge sums into innovation at a rapid pace, some fear that the EU could end up playing a secondary role.

Experts suggest that Europe’s “extra gear” might come from balanced regulation—not absent, yet not stifling—and from major investments in talent development and the creation of a synergistic ecosystem that brings together companies, universities, and governments.

Over the past decade, Europe has led the way in data protection, becoming a global benchmark. At the same time, the challenge remains: how do we make the most of that 200-billion-euro investment in AI without letting regulatory hurdles and bureaucracy stifle innovation?

Perhaps the answer lies in the concept of balance: recognizing the importance of protecting fundamental rights while also acknowledging the need to compete in a global market that waits for no one. If Europe succeeds in blending these two objectives, it might just transform itself from a tortoise to a hare in the race for digital transformation.

What’s your take on all this? Write to me at giulio.coraggio@dlapiper.com with your thoughts and reflections. I’m Giulio Coraggio, and this is “Diritto al Digitale.” See you next time!