The current global digital rivalry is dominated by two nations: the US and China. This race for cyber supremacy is shaped by three core factors: access to open-to-risk capital, innovation, and the increasingly growing impact of AI technologies. The EU, its institutions, member states governments’ agencies, businesses, and research centres, while possessing a unique regulatory framework centred on such values as privacy, fairness, and fundamental rights, has not played any substantial role in this race. Instead, the EU has focused on regulation, emphasizing axiological principles that reflect its historical identity rooted in peace, solidarity, and human dignity. The overarching feature is that the laws, policies and regulations as well as the general governance framework are deeply immersed into the axiological expectations of the European elites.
The global digital superpowers have secured their dominance through significant investments in innovation, fast-tracking AI breakthroughs, and leveraging vast amounts of capital. In contrast, until recently the EU has focused on regulatory values that underscore its commitment to a human-centric digital space. Indeed, the EU has hoped to carve a niche as a "global regulator” deeply embedded in values. However, the question arises if this approach has sidelined the EU from the technological competitive arena. Without a more dynamic investment in technological innovation, and appreciation of the unprecedented, aggressive geopolitical environment, the EU risks becoming a reactive actor and missing the momentum. The EU has realised it must balance its value-based and risk-averse regulatory agenda with an increased focus on incentives that push for innovation and digital competitiveness. This recalibration involves leveraging the EU's institutional strengths, including its single market power, research capacities, collective bargaining and dropping out of some of the legislative initiatives.
