Boosting Europe’s AI Leadership: Why Massive Telecom Investments and Regulatory Reform Are Essential in 2026

Europe needs substantial additional funding to realize its bold AI goals and maintain global competitiveness in the rapidly evolving digital landscape.

Accelerating adoption of cutting-edge, reliable, and secure connectivity infrastructure stands as a cornerstone for success. Policymakers must prioritize supportive regulations, streamline cross-border rules, and drive harmonization alongside advancements in hardware and deployment.

Artificial intelligence now permeates nearly every discussion, underscoring its transformative influence across industries. European leaders fully recognize this shift. In early 2025, European Commission President Ursula von der Leyen emphasized Europe’s aspiration to rank among the top AI powerhouses worldwide, highlighting its role in enhancing economic strength, safeguarding security, advancing healthcare, and broadening equitable access to information and expertise.

Recent Nokia-commissioned research reinforces widespread corporate alignment with these objectives: among over 1,000 surveyed executives, 84% integrate AI into core organizational expansion plans, and 62% allocate at least one-fifth of their IT and communications capital spending to AI-related initiatives.

Yet a critical gap persists between vision and execution. Three in four respondents report that existing telecommunications setups hinder full realization of AI objectives. Nearly half indicate these constraints could postpone, reduce, or block planned investments entirely.

Europe trails the U.S. and select Asian markets in network rollout speed, funding volumes, and overall capacity. Without unlocking AI’s complete capabilities, the region faces diminished industrial edge, capped GDP expansion, restricted employment opportunities, and limited citizen advantages.

Advanced connectivity forms the indispensable foundation for AI deployment—reliable, high-capacity, secure networks are essential, not optional. Current European systems demand significantly greater capital inflows to support widespread AI integration.

Business leaders rank insufficient connectivity as a top-four barrier among various challenges to fulfilling AI requirements.

Regulatory frameworks for telecommunications should better align with AI promotion goals. Key steps include establishing a true single market for telecom services, revising antitrust rules to enable strategic mergers that boost funding capacity, and mandating robust security standards across all network layers.

Enabling Scale Through Strategic Operator Mergers

AI workloads impose stringent requirements: ultra-low delay, massive throughput, unwavering stability, and intelligent traffic handling. Meeting these needs calls for accelerated rollout of standalone 5G, enterprise fiber connections, distributed edge facilities, and AI-tuned IP-optical cores.

Operators must increasingly embed automation and AI within their own operations to enhance efficiency and performance. Allowing national-level consolidation among providers would generate cost savings, operational synergies, and greater financial headroom for innovation and upgrades.

Prioritizing Security and Reliability

Safeguarding intellectual assets and critical sectors (energy grids, transportation, defense) against cyber threats and foreign dependencies remains vital. Only vetted, trustworthy equipment should underpin essential systems. The existing 5G security framework, which curbs risky vendors, should expand to cover fiber, optical transport, and IP technologies—and become mandatory EU-wide. Governments bear responsibility for shielding industries and populations through stringent safeguards.

Advancing a Unified Digital Market

Despite the single market’s foundational status in the EU, telecom remains splintered by varying national spectrum allocations, licensing regimes, and rules that impede seamless cross-border operations and slow infrastructure expansion.

Complementary Measures to Empower AI Growth

Beyond connectivity upgrades, policymakers should champion these interconnected priorities:

• Compute resources expansion: Initiatives like the AI Continent Action Plan, IPCEI Compute Infrastructure Continuum, and EuroHPC Joint Undertaking should drive construction of sovereign AI data centers across the continent.
• Edge computing dominance: Targeted backing for European edge infrastructure will deliver faster processing for real-time AI applications, spur innovation, and stimulate regional economies.
• Regulatory alignment and clarity: Overlapping frameworks—from the AI Act and GDPR to the Data Act, cybersecurity directives, and industry rules—generate complexity. Streamlining and unifying these will reduce uncertainty and accelerate deployment.
• AI Act refinements: Delays in high-risk standards development risk stalling compliance. Postponing high-risk obligations by two years would synchronize with standard-setting timelines. Sharper definitions and overall simplification would prevent policy from stifling progress.
• Workforce transformation: Preparing talent through education, reskilling programs, and new vocational pathways ensures Europe capitalizes on emerging AI-driven roles.

Delivering on these fronts promises enhanced public services, resilient industries, elevated global standing, and accelerated prosperity. AI rewards those who invest strategically and act decisively.

The time for coordinated, urgent progress is now.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.