China may restrict AI model exports, squeezing Europe

China is considering limiting foreign access to its most advanced AI models, a move that would reshuffle the global AI landscape. Chinese officials have held talks with tech giants like Alibaba and ByteDance about potential restrictions, including on unreleased models. This follows a pattern of protectionist steps, like ordering Meta to unwind a startup acquisition and investigating Chinese AI firms abroad. For Europe, which relies heavily on cheap AI alternatives from both the US and China, this is a major risk. The continent is already struggling to build its own AI capacity through the €200 billion InvestAI initiative, but its data center plans are behind schedule and the budget is tiny compared to what American tech companies spend. Meanwhile, European AI talent is increasingly flowing into foreign models. If Beijing locks down access, costs for companies outside the US and China will rise, and Europe’s already weak position could erode further. Why it matters: This signals a new phase where AI is treated as a strategic asset by both superpowers, potentially forcing Europe and other regions into a costly scramble for self-sufficiency or a more precarious position between competing technology blocs.