Brussels has just entered a new phase in the global artificial intelligence  (AI) race. For the first time, a major regulatory authority has moved beyond writing rules for artificial intelligence and into the much harder business of enforcing them against the companies developing the world’s most powerful AI models. At the center of this effort is the European Commission’s Artificial Intelligence Office. The team has around 37 people. The job of the AI Office is to supervise some of the most powerful AI companies in the world — companies such as OpenAI, Anthropic and Google, as well as Chinese competitors including DeepSeek. The contrast is striking. On one side, we have companies with enormous financial resources, thousands of engineers and researchers, and the ability to develop new AI models at extraordinary speed. On the other, we have a few dozen European civil servants in Brussels. The question is not simply whether Europe has created an AI law. It has. The real question is whether Europe has created a regulator capable of enforcing that law effectively.   The legal story The foundation is the European Union’s AI Act. The Act entered into force in 2024 and created a risk-based regulatory framework for artificial intelligence. For the most powerful general-purpose AI models, particularly those considered capable of creating systemic risks, the obligations are much more demanding. Companies are expected to assess and mitigate serious risks associated with their models. Those risks can include the use of AI to facilitate biological, chemical or nuclear attacks, major cyberattacks, large-scale manipulation, and the possibility of losing control over highly capable AI systems. And now the important part: The European Commission has enforcement powers; It can request technical information and documentation; It can evaluate models; It can require companies to implement corrective measures. And in serious cases, it can impose financial penalties. The Commission’s official description of the enforcement regime confirms that, from August 2, 2026, the AI Office and national authorities are responsible for implementing and enforcing the relevant provisions of the AI Act. This changes the relationship between Brussels and the AI industry. Until now, companies could largely view the European rules as something they needed to prepare for. Now there is an institution with the authority to investigate what they are actually doing.   The economic question This brings us to the economics. AI is becoming one of the most strategically important technologies in the global economy. The United States currently has enormous advantages because many of the leading AI companies are American. China is investing heavily and developing its own powerful models. Europe is trying to avoid becoming merely a consumer of technology developed elsewhere. That creates a fundamental dilemma. If Europe regulates too aggressively, companies may decide that launching or developing AI products in Europe is more difficult and expensive. That could potentially hurt European innovation and competitiveness. But if Europe does too little, it could expose European society and businesses to serious risks while allowing American and Chinese companies to determine the rules of the technology. The EU therefore appears to be pursuing a third option: regulate the risks while trying to preserve the economic benefits of AI. That is a difficult balance. And there may actually be an economic advantage to regulation. If businesses and consumers believe that AI systems are being independently scrutinized for safety, they may be more willing to adopt them. In that sense, safety and trust can become part of the economic infrastructure of the AI market. Europe is effectively betting that responsible AI can be compatible with competitiveness.   The political dimension Politically, this is perhaps the most important part of the story. The European Union has developed a reputation for regulating large technology companies even when those companies are based outside Europe. This is sometimes described as the Brussels Effect. The basic idea is simple. Europe has such a large and valuable market that multinational companies may find it easier to adapt their global products to European standards than to maintain completely different systems for different markets. AI could become the next major example of this phenomenon. The EU is effectively telling the world’s AI companies that “If you want access to the European market, you have to play by European rules.” That gives Brussels influence over companies that are headquartered thousands of kilometres away. It also has a geopolitical dimension. Europe increasingly wants greater technological sovereignty. It does not want to become completely dependent on American technology or Chinese infrastructure. AI is therefore not just an economic issue. It is becoming an issue of strategic autonomy and national security.   The question of power There is also an important distinction between legal power and practical power. The EU can theoretically fine a company. But the more interesting power may be the ability to demand information, inspect models and require changes before or around the time they reach the European market. That gives the regulator a position inside the AI development process. Imagine a company preparing to release a new model. The regulator asks: What can this model do? What tests have you performed? What happens when it is deliberately attacked? Can it independently conduct cyber operations? Can it be manipulated into dangerous behaviour? What happens when it has access to tools? What happens when it is allowed to operate autonomously? And, critically: What evidence do you have that the safeguards actually work? But can Europe keep up? AI development is moving extremely quickly. Regulation moves more slowly. The companies have enormous computing resources, huge research teams and access to vast amounts of capital. The European regulator has legal authority, but a relatively small number of people. The Commission itself appears to recognize the problem. It is expanding recruitment, with additional staff expected in the coming years. The AI Office is intended to grow substantially beyond its initial staffing level. So this 37-person team may actually be the beginning rather than the final form of Europe’s AI regulator.   The bigger picture What we are witnessing is therefore bigger than one European Commission department. It is an experiment in whether democratic governments can regulate frontier artificial intelligence before the technology becomes too powerful and too economically important to regulate effectively. The EU has chosen a precautionary approach. The United States has traditionally relied more heavily on private-sector innovation and a less centralized regulatory structure. China has pursued a much more state-directed approach. Europe is attempting something different – it is looking to  create binding rules, give regulators real enforcement powers, and try to make safety part of the competitive market. Whether that works will depend on three things.
  • First, technical competence: can the EU attract enough people who genuinely understand frontier AI?
  • Second, regulatory credibility: will the Commission actually use its powers when a major company crosses a line? And
  • third, economic balance: can Europe protect its citizens without making itself irrelevant in the global AI race?
That is the real test beginning now.   Voluntary Transparency Notice Use of AI: This text includes AI-assisted content. Workflow: I regularly review a broad range of authoritative sources to stay informed about the topics discussed. I independently develop my analyses, opinions, and conclusions, and use AI solely as a tool to help organize and summarize my thoughts, as well as to assist in preparing the podcast transcript and the accompanying blog post. All content is carefully reviewed, refined, and validated by me before publication, and I take full responsibility for it. Personal capacity: The views expressed are my own and are provided in my personal capacity. They do not necessarily reflect the views of any organization with which I am affiliated.