In a stark warning to European governments, the chief executive of software giant SAP has stated that the continent risks being left behind by the United States and China in the critical global artificial intelligence competition. Christian Klein, CEO of the European tech leader, blamed fragmented markets and excessive regulatory burdens for this looming threat.
"Europe Stands in Its Own Way": A CEO's Critique
Speaking at the Reuters NEXT conference, Klein argued that the European Union is actively hindering its own technological progress. He claimed that by implementing strict guardrails too early in AI's development cycle, the bloc is stifling innovation. "[Europe] stands in its own way ... regulating where nothing has to be regulated," Klein stated. He emphasized the need for a more united Europe with significantly less red tape to allow nascent AI models the space to scale and evolve.
While acknowledging Europe's heightened geopolitical importance, Klein was sharply critical of its current legislative approach to technology. His comments arrive as European lawmakers are reportedly reconsidering the timeline for the landmark EU Artificial Intelligence Act. This comprehensive law, which entered the rulebooks in 2024, is being applied in phases.
Play to Industrial Strengths, Don't Copy Rivals
Klein advised Europe against mimicking the consumer-focused strategy of the US or the infrastructure-heavy model of China. Instead, he urged a pivot towards the continent's established industrial expertise. He highlighted deep talent pools in cities like Munich and Paris, and Europe's dominance in sectors like automotive and manufacturing.
However, he noted these industries face "huge pressure" from high energy and labour costs. "Europe should focus on vertical use cases where we have expertise and data, not just building more data centers," Klein recommended, suggesting a more targeted, practical application of AI.
The "Legal Chaos" of the AI Act and Delayed Rules
The SAP CEO's warning aligns with growing debates over the EU's AI Act. Following pressure from industry and some member states, the European Commission has proposed delaying the final set of rules for high-risk AI systems. These rules, which many analysts have labelled a 'legal chaos' or 'legal nightmare', are currently set to apply from August 2, 2026.
To change this date, the law must now be amended through the EU's standard legislative process involving the European Parliament and the Council of the EU. This delay highlights the ongoing tension between the desire for pioneering regulation and the fear of crippling a key future industry.
Klein's intervention adds a powerful business voice to the argument that Europe must streamline its approach or risk becoming a spectator in the AI revolution led by America and Asia.
