Marieke Blom: Tough questions on AI dominated Davos, but Europe’s position may be more comfortable than you’d think in World Economy News 02/02/2026 Geopolitics, competition, and the global AI race We’ve learnt quite a bit since last year: China does get access to advanced Nvidia chips, much of the recent US economic growth stems – directly or indirectly – from AI, and corporates are still wondering how to make a return on their investments. An uncomfortable number of AI discussions at this year’s World Economic Forum ended with the same conclusion: “We don’t know yet.” Yet surprisingly, Europe may be better positioned in this phase than many assume. Last year, AI chiefs were unequivocal: prevent China from accessing the most advanced chips. That message has clearly not become reality. As Howard Lutnick described in a recent Bloomberg interview, there was an intense debate inside the Trump team, with ‘strong arguments on both sides’. The room remained unconvinced by each other’s reasoning, yet the president ultimately decided the exports would go ahead. Whether this was driven by economic calculations, strategic optimism, or simply the belief that China would prefer Nvidia over developing domestic alternatives – we still don’t know. But we do know the outcome: for now, access to advanced chips will not stop Chinese AI development. AI leaders described today’s competitive landscape as “ferocious” and “difficult to keep up with.” Both Dario Amodei and Demis Hassabis emphasised this, with Amodei noting (without hiding his regret) that if the US had blocked Nvidia chips for China, “it would have only been between the two of us.” In other words: without China, the race would have narrowed to a near-duopoly. Meanwhile, the technical trend is clear: models are becoming smaller and more targeted, designed to reduce compute and energy needs. Prices are falling – or more precisely, for the same price, users are getting higher quality. And despite relying heavily on open source approaches, Hassabis estimated the Chinese players are only around six months behind. Corporate reality, economic effects, and Europe’s strategic position Across the consultant-hosted sessions, the dominant theme was corporate return on investment. Many companies feel they must adopt AI to stay competitive, yet they cannot confidently point to where the value will come from. This was obvious from the conference stages and even more so in private conversations. Consultants stand ready to help them navigate the landscape – often by shopping more intelligently among a growing list of models – but the fundamental question remains open: Where will AI create the big shifts? Right now… we don’t know yet. Whether AI is already visible in labour market data remains debated, mostly because it’s still early. But coding is the exception: fewer people are needed, and tasks that used to require full teams can now be done by much smaller groups. Anecdotes were plentiful. I ran into some lawyers who told me that the tedious administrative work – copying, pasting, searching through legal texts – is now largely done by AI. Their clients have noticed, and procurement departments are increasingly demanding lower prices. As an economist, this uncovers something important: we may not see the AI effect in productivity statistics, but we may see it in lower inflation. One striking shift from last year: AI leaders now focus their messaging on their relative strengths, revenue growth, and pitching t