What happened with Europe?

This weeks Kludder: What happened to European competitiveness? Google invites 5000 to their annual I/O-event. The Norwegian newspaper VG slips on AI, and OpenAI with a big acquisition.

In Kludder, it's all about technology. Every week I want to put the spotlight on tech that surrounds us, some of which you might have barely heard of, and try to explain it more in detail. But much of what I write revolves around American tech companies. Have I forgotten about Europe?

The reality is that most of what happens on the tech front today comes out of China and the USA.

Europe does not house giants of the same caliber as Meta, Google, Amazon, or Apple – a company that alone has a value higher than Germany's entire stock market.

An existential challenge for Europe

This is precisely what Mario Draghi, former head of the European Central Bank, called an "existential challenge" in his report on European competitiveness. The report gives cause for concern: Only four of the world's 50 largest technology companies are European.

Europe largely missed out on the digital revolution led by the internet and the productivity gains it brought: in fact, the productivity gap between the EU and the US is largely explained by the tech sector. The EU is weak in the emerging technologies that will drive future growth. - Mario Draghi.

The numbers speak for themselves: The US has created more than 240 companies worth ten billion dollars or more in the last 50 years. Europe has created 14, according to Andrew McAfee, a researcher at MIT Sloan who also runs The Geek Way, which you can find on Substack.

Tech companies love the Valley

Today it's common for European companies to head to the US and Silicon Valley to accelerate growth. There you'll find Norwegian Tana, among others, a company that develops an AI-driven productivity platform with offices in both Oslo and California. And they're not alone. Entrepreneur Han Xiao tells the Wall Street Journal that he's considering moving his company, Jina AI, from Berlin to the US due to the EU's strict regulations:

When Germans talk about AI, the first topic is ethics and regulation, whereas investors in the U.S. and China focus on innovation - Xiao to the Wall Street Journal.

Even businesses that succeed in Europe are often acquired by American giants. Just this month, the American food-delivery company DoorDash is acquiring i Deliveroo, one of Britain's top growth companies.

Norway struggles with adaptation

Back home, here in Norway, Abelia examines Norway's adaptability through its annual Omstillingsbarometer. The conclusion is hardly uplifting:

Norway lacks relevant specialized and technological expertise, and still has weak access to international competence. Norwegian companies are falling behind when it comes to using enabling technologies, such as artificial intelligence. We have low entrepreneurial activity, and very limited access to risk capital - Abelia's Omstillingsbarometer 2024.

Innovation or control?

In several issues of Kludder, I've shown examples of how lack of regulations can lead to technology that does more harm than good – from AI bots that initiate sexual conversations with minors to World giving away money if you scan your eyes.

At the same time, the absence of innovation in Europe is concerning. Draghi points out that the EU is entering a period where we can no longer rely on increasing population numbers. By 2040, he estimates that the working-age population in Europe will decrease by 2 million people every year.

I really hope that Norway and the EU can accelerate their innovation machinery. There are, after all, exciting European companies that we need to keep in Europe. I also hope that smart regulatory guidelines can give us the necessary security in a world where technology seeps into all parts of our lives.

But as things stand today, it's particularly the US that has its hand on the steering wheel when it comes to how we use technology. And how technology uses us.

Google festival: The biggest news from I/O 2025

This week, Google is hosting its annual developer event, Google I/O. 5000 people gather in Mountain View, Santa Clara for two days of insight into all of Google's products, innovations, and new services. Maybe I'll get the opportunity to go there myself one day. But for now, I've collected four news items that the company has launched over the past two days:

Gemini Live: The AI assistant takes over your mobile

Google's own language model, Gemini, is in the process of entering mobile phones. Gemini Live should be able to understand input from the mobile camera, is voice-controlled, and can search the web for you. Essentially, this is meant to become a super tool that can gather information on your behalf and free up time.

But like everything else, this AI is also hungry for data, which is not surprising since Google is behind the service. Gemini will learn your writing style by scanning content from Gmail, notes, Google Docs, and Google Sheets. The service is called Personal Smart Replies.

With Smart Replies, I can become a better friend - Google CEO Sundar Pichai from the stage during I/O 2025.

Pichai uses the service to write replies to friends he otherwise wouldn't respond to because he's too busy being the Google CEO.

But if you want to use the services, you need to shell out. The Google AI Ultra subscription costs a whopping $250 per month.

AI Mode: Google responds to search exodus

April was the first month in 22 years(!) where Google experienced a decline in internet searches. The reason is likely increased use of tools like Perplexity and ChatGPT. That's why the search giant is in full swing upgrading its own search service through AI Mode – a more chat-based search experience.

But it remains to be seen whether Google finally cracks the AI code. Last year they launched "AI Overview," which was supposed to give users simple summaries. It resulted in wild hallucinations, like recommending glue on pizza to prevent the toppings from sliding off, or that geologists recommend eating one stone a day.

Virtual shopping

AI Mode also aims to become a shopping assistant. When you shop for clothes online, you can upload a picture of yourself that AI Mode then generates a new image of – with the clothes you're considering buying.

Android XR: Google's smart glasses

Your eyes are a hot potato in the tech industry. Last week I wrote about the iris scanner Orb from the company World. Meta has already, through a collaboration with Ray-Ban, its own smart glasses, and Snapchat has Spectacles.

Now Google wants to join the fun with Android XR – the company's own smart glasses (which I think is a missed opportunity: They should have called them Goggles!). During the demo, you could see maps, text, images, and more appear in the users' field of vision. Google has entered into a partnership with Warby Parker for the design of the glasses.

And now for a summary of interesting tech news. I thought it would be appropriate with a roundup from Norwegian media, and of course OpenAI made the news this week as well.

VG's AI blunder

This week, VG corrected an article about Vendela Kirsebom and Victoria Beckham's fashion dispute. It contained fake quotes from Kirsebom. Additionally, Kirsebom had been given a middle name she never had before. VG now informs the website Journalisten that they are making adjustments to their AI tool.

In my opinion, this has received far too little attention, perhaps because of a certain Russian-sponsored advertisement on public transport. When an established newspaper outlet like VG doesn't have control over what is AI-hallucination or not, how can readers be sure that the information being reported is real?

EU regulation may level the playing field in Norway

The Digital Markets Act (DMA) is a regulation from the EU intended to level the playing field between tech giants and smaller players. This week, Digitalization Minister Karianne Tung could report that work to implement the DMA in Norway is well underway.

Press organizations in Norway believe it's high time, after experiencing unfair competition conditions against players including Meta, Alphabet (Google), and Microsoft.

"That editor-controlled media lose advertising revenue has been a problem for a long time, and I am of course concerned about how this affects the industry and the media offering," writes the Norwegian Minister of Culture and Equality, Lubna Jaffery in an email to Journalisten.

Aiming to plug the AI gap

The Norwegian startup Prompt Shields aims to prevent employees from transferring sensitive information to AI models such as ChatGPT, Claude, Gemini, and Llama. CEO of the company, Jun Seki, tells Kode24 that IT managers across the country are trying to solve this problem, without success. Prompt Shields should be able to help with that.

OpenAI opens its wallet

On May 20th, the book about Sam Altman, The Optimist, was released (you can read what the author of the book, Keach Hagey, said to Kludder here). And while I'll be reading about Mr. Altman, he has opened his wallet and forked out $6.5 billion for the hardware company io. With the purchase, OpenAI shows that they are serious about plans to enter the hardware market. Perhaps they plan to take on the smartphone?

Are you enjoying Kludder in English? It means the world to me if you'd share it with some friends!