European Central Bank President Christine Lagarde said Europe can still capitalize on artificial intelligence, even without leading the way in developing frontier models. Speaking at an event in Frankfurt, Lagarde emphasized that Europe's strengths in regulation and ethical standards could help the region benefit from AI adoption.

Lagarde's comments come as the European Union races to establish itself as a global leader in AI governance through its AI Act. The bloc has taken a different approach than the US and China, focusing on creating comprehensive rules for AI development and deployment rather than competing directly in model creation.

While Europe lags behind the US and China in AI infrastructure and computing power, Lagarde suggested the region's emphasis on privacy and consumer protection could become competitive advantages. She noted that European companies are increasingly integrating AI into their operations, potentially boosting productivity and economic growth across the continent.