KPMG study positions Europe ahead of China in AI capabilities
Europe is often regarded as a laggard in the AI space, but a new study by KPMG and the AI Federal Association has found that the European region, when it comes to AI capabilities, narrowly beats China. However, the USA is unsurprisingly still far ahead in this field. The study develops scenarios and courses of action for AI sovereignty in Europe based on a “Strategic AI-Capability-Index”.
USA, Europe and China in country comparison
With the study, KPMG examines the global distribution of AI power and develops future scenarios through 2040. The English-language study is titled “AI Geopolitics 2030: The new power distribution through strategic AI sovereignty” and is aimed at decision-makers who must set strategic direction under high uncertainty. It combines a structured country comparison with four possible development paths for global AI architecture.
The heart of the analysis is the Strategic AI Capability Index (SACI), which compares AI capabilities in the USA, Europe and China. The index is based on three pillars: economy and infrastructure, strategy and governance, and research, development and skills. The authors conducted a global survey and combined it with secondary research. All results are standardized on a scale of 0 to 100, enabling cross-regional comparisons.
Europe scores points on governance and responsible AI
At the top of the index are clearly the USA with 75.2 points. Fast corporate adoption, deep capital markets and scalable infrastructure drive this position. Europe achieves 48.7 points and thus ranks ahead of China with 48.2 points. Europe’s strengths concentrate on governance and responsible AI, while fragmentation and slow commercialization hold the region back. China demonstrates impressive industrial capabilities and hardware sovereignty, but struggles with lower international openness and less public trust.
The study emphasizes that lasting AI leadership does not emerge from isolated technological breakthroughs. What remains decisive is the ability to turn potential into impact. This must happen consistently, responsibly and at scale. Each of the three models has advantages and disadvantages. The challenge is to align technology, governance and talent in ways that meet regional priorities while remaining globally competitive.
Four future scenarios through 2040
Building on the SACI index, the study develops four scenarios that map possible development paths of global AI architecture through 2040. The scenarios span two central dimensions: the distribution of AI power (distributed versus centralized) and geopolitical order (cooperative versus fragmented).
In the “Federated Future” scenario, global AI ecosystems emerge through shared standards and interoperable infrastructure. Europe could actively shape standards and leverage interoperability as a strategic advantage. In the “Platform Supremacy” scenario, a few tech giants control computing power, models and energy, while state sovereignty formally remains. Europe’s challenge is to reduce dependencies and build its own resilient platforms.
The “Sovereign Blocs” scenario concentrates AI power in regional alliances based on security and cultural priorities. This opens Europe the opportunity for an autonomous strategy, but requires speed and scaling. The fourth scenario “Algorithmic Convergence” describes global technological convergence despite political fragmentation. While states draw borders, AI systems grow together. Architecture and learning logics determine power distribution; state levers of influence lose effectiveness. In this scenario, Europe’s levers lie in governance and key technologies for algorithmic systems.
