Merz: Germany needs $100 billion AI push to keep control
Chancellor Friedrich Merz warned that Europe risks losing its digital independence to foreign providers unless it modernizes its state and economy quickly.
By Marco Kapoor ·
Germany must spend an enormous amount of effort to modernize its state and economy, Chancellor Friedrich Merz said on Monday, calling the development of domestic artificial intelligence capabilities an existential question.
Speaking at a conference in Berlin, Merz argued that nations risk surrendering control to outside providers as AI becomes embedded in the global economy. He stated that Germany and Europe must move more quickly to develop their own AI capabilities to protect their digital sovereignty.
Merz pledged to accelerate efforts to digitalize the economy. He said the goal is to produce and manage technologies independently, securely, and autonomously throughout the entire value chain, from hardware to software. The Chancellor noted that adapting to these changes requires a far-reaching modernization of both the public sector and private industry.
The government appointed a minister for digitalization and modernization when Merz took office last year. His administration has vowed to intensify efforts to close the technological gap with faster-moving European economies, specifically citing the Netherlands and Denmark. Merz highlighted Germany's strengths in industrial engineering while announcing plans to work with partners such as Canada and France.
Germany established a national AI strategy in 2018. Many domestic firms and startups have already adopted and integrated the technology. However, the Ifo economics research institute reported that the country is still not ready to fully exploit the AI boom. The institute pointed to a small high-tech sector, poorly digitalized public services, and skill shortages as major hurdles.
The Ifo institute noted that many German public administrative bodies and companies still rely heavily on physical paper for correspondence and record keeping. Merz returned to Berlin last week after a five-day visit to Singapore, Japan, and South Korea, where he emphasized the need for independent technological management.
