President Calviño on artificial intelligence: "In Europe we race as a team"

Thank you very much for the opportunity to share some thoughts with you on an issue that I am quite interested in, where we are all extremely interested in. But not only my current position as president of the European Investment Bank, but also as my previous position as vice president of the government of Spain and minister for economy and digitalization. Normally, people have been focusing a lot on the first part of the job, the economy and finance minister. But actually, the second part of my job took a lot of effort and a lot of time to the digital transformation of the country. And so, I think that this issue of new technologies and Europe's leadership is actually one of the key issues of our time.

The conversation about artificial intelligence and how to make it be a driver of success, security and competitiveness in Europe, is undoubtedly one of the key conversations of our time. And there is a lot of discussion about the threats, but I think all of us gathering here today are quite clear about the fact that AI is an incredible opportunity from a business point of view. Just now, the minister was outlining how important it is for the technology to be embraced and incorporated into the businesses, into the small and medium-sized companies of our economies. And I think it's useful for us to kick start the discussion today, reflecting on three issues, the benefits of artificial intelligence, what can it bring to our societies and our economies, Europe's position as a competitor in the race.

And thirdly, what we need to do to make these a European success. And of course, the role of the European Investment Bank, as you rightly said, that has been highlighted by the Draghi report and so many. Now, artificial intelligence is already benefiting the world. It's already operating here in Luxembourg, across Europe. And I don't mean just the generative artificial intelligence, which is always capturing the attention of media with chatbots, with the large language models. I'm talking about industrial artificial intelligence, which is already streamlined into our factories, mapping our cities, driving the future of crucial sectors such as energy, healthcare and security.

Just an example, there's an artificial intelligence company in Munich called OroraTech. It is actually supported by our subsidiary, the European Investment Fund. And the team at OroraTech have trained artificial intelligence to study satellite temperature data, to better understand and predict the start and spread of wildfires. So, actually, they're working to solve problems on our planet from outer space. And these AI train systems process the data much faster than any other technology that we've ever had, at a scale that was unimaginable just very recently. And they have already been able to address and solve problems that would've been unthinkable very recently.

So, now, combining these thermal images with weather data, we can predict with much more accuracy how the fire is going to turn into an inferno for the firemen, for example. And so, this means we can take preventative measures. This means we can lower the CO2 cost. So, there are significant gains from artificial intelligence technologies, and this is just one example of the thousands of companies that right now are benefiting from this. And it is clear that it is a booster for our competitiveness. There are industries in Europe that are already designing machinery that will then be used as prototypes to develop the new techniques, from medical machinery to coffee machines, products that last longer, cost less. And this is just the beginning.

This is probably one of the most used expressions you will have this afternoon, I think, this is just the beginning. Nobody really knows where this can take us. So, artificial intelligence can really benefit and improve our way of life. It is properly funded, adequately harnessed, and efficiently integrated. This brings me to the second point. So, where is Europe in this race? Because yes, let's be honest, there is a race going on in global markets and there is a constant aim to see who can reap the benefits of this new technology. In the expectation that this is going to... as it has always been throughout history, it is going to allow a company or a sector, or a country, a region of the world to become a monopolist in these new technologies.

Interestingly, monopolies we have seen may not last that long. It is for the moment a quite contestable market that we are talking about, where new developments are taking space. And so, the competition is far from closed, far from won. And we have one advantage in Europe, that many times becomes or we don't realise it is really an advantage for us right now in this war, where many others have other great advantages. And this is that we are racing as a team, because artificial intelligence is a new market. So, conversely to other many areas, we don't have 27 markets already existing, with 27 structures, and incumbents, and ingrained regulatory frameworks that now we would need to start to harmonise.

Fortunately, this time around, we've been able to start with an artificial intelligence act at European level, which would allow these technologies to develop at European level. So, that is already giving us a good advantage. And these new technologies, sooner or later, are going to hit the wall of the issue of trust and confidence, as is always the case with citizens. So, you need to ensure that this is developed in a manner which provides certainty and confidence to businesses about the data gathering, the data integrity, the security, and also to citizens.

So, from this point of view, I think that the more that we can have a regulatory framework, which is European and which allows to have a risk-based approach, so that we are only trying to control and have systems related or procedures related to those elements, of those uses of artificial intelligence that can create risks for our economy, our security, our societies. In so far as we have this risk-based approach, we can really try to favour a situation where we move from the thousands of scale-ups, successful, brilliant startups that exist in Europe, to scale-ups, so that they can really compete at a global level.

And that brings me to the third point. So, what can we do to make sure that this is a European success? As I said, and this is exactly with the Draghi report, and the Letta report, and the Yenista report, all the expert reports, they tell you what are the three drivers for Europe's competitiveness. Integration, investment, simplification. It's really a no-brainer. It doesn't require a lot of effort to understand that in the case of artificial intelligence, we need to integrate these technologies into our industrial processes and business processes. We also need to make sure that markets are integrated. And when we're talking about investment, we're talking about capital market integration.

I hope this is an issue that is discussed this afternoon. Quite relevant for Luxembourg, by the way. How can we ensure that we are dealing with a European integrated capital market that can mobilise the necessary investments to scale up Europe's successful startups? So, integrating AI capabilities into existing companies. Integrating European markets so that we can really mobilise the billions that are needed for companies to grow and for these investments to be mobilised. Then we need to find the best possible public-private partnerships so that we can mobilise private investment in this area.

Here is where the European Investment Bank Group is very well-placed. We generally act as a catalyst, so we leverage, we leverage the guarantees from the European budget. We leverage our own capital by doing investments, which then mobilise private investors in this area. We are currently working on a new tech EU programme, trying to work together with the European Commission, how we can bring together all the available resources and programmes, and try to leverage it to the maximum so that we can mobilise the necessary investments from the private sector.

I cannot give you any preview or heads up today. We have already highlighted that we are working with the commission to support the financing of the new invest AI initiative. So, to build and to invest in infrastructures. Part of it is these supercomputers the minister was just talking about a minute ago. These computing capacity that can serve as a public good to be used by European businesses and universities. We're also working with the commission on the scale up fund to see how we can really provide the capital needed for these innovative companies to grow fast. We're working on another of initiatives to try to mobilise Europe's capital.

And then the third thing we need is simplification. I am sure here in the Chamber of Commerce I will have unanimity, in that we need to simplify the rules. We need to simplify the procedures. We just published the investment survey with 13,000 European companies. It's a yearly report by the European Investment Bank, which showed that 60% of exporting European firms, 74% of frontier innovators say they face barriers derived from national regulation, from consumer protection standards when they export to another country inside the European Union. More than 3% of the costs of companies are derived from red tape, excessive bureaucratic burdens.

So, we very much welcome the initiatives launched by the European Commission, these omnibus proposals. This is a first step in the right direction to simplify the regulatory framework so that we can really make this green and digital transitions a European success. Let me conclude by this more general reflection on what's going on in the world. It's difficult to say what's going on because the situation changes on an hourly basis, on a daily basis. But it's clear that the world is quite complex and is constantly shifting. Perpetuum mobile is probably the new normal that we need to adjust to in terms of the framework.

In this complex and constantly moving and increasingly troubling world, Europe can play a very important role because right now what we bring to the world is precisely stability, confidence, a clear outlook for the future. And that's very important for investors around the world, that they know that Europe is going to provide the security stability as a very large internal market that can actually also build partnerships around the world, which bring win-win solutions. Sounds old-fashioned, but when we interact with our counterparts, and I'm doing this all the time with the rest of the world and international financial institutions, et cetera, they see Europe as a key partner. Because we are usually trying to build win-win solutions, where both parts of the agreement are actually winning out of that agreement.

And from this point of view, I would like to leave you with this message of confidence, self-confidence, and a bit of optimism, because this is an area where when we are discussing artificial intelligence, we obviously are starting from not the first position in these new markets. We obviously are confronting very formidable powers around the world, but this is a nation's market. This is just the beginning. And every battle that we have ahead of us, we must try to win. That is very much my approach. And I am sure that the debate that you will have today is going to bring a lot of very useful proposals. I unfortunately cannot stay, but I will leave a spy in the room that will tell me exactly what ideas and what requests you have so that we can really make this a common, a joint, a European success. Thank you very much.