At Rise of AI 2025 in Berlin, in his opening keynote "State of AI 2025," Fabian Westerheide, CEO of Rise of AI and AI.Fund, surveys the global AI landscape under the year's theme "Good News from Europe." He argues China has proven itself the clear technological number two, pointing to DeepSeek and Manus as evidence it can take American innovation and make it leaner and more cost-efficient, while the United States remains number one and is now largely unleashed from regulatory constraints as government and tech industry interests align. He notes new investment hubs emerging in Saudi Arabia and the UAE, including a deal in which Saudi Arabia is pushed to invest a reported one trillion dollars in exchange for one hundred billion back. He argues Europe cannot compete with the US and China on large language models given its gaps in talent, resources, capital and infrastructure, and must instead become smaller, slower and more specialized, building on many small success stories rather than one big win. He then walks the audience through the day's three stages, Policy & Society, Applied AI and a new offline "Cognitive Labs" format, and their speakers.
Key takeaways
- Westerheide says China proved itself the clear AI number two via DeepSeek and Manus by taking American innovation and making it leaner and cheaper.
- He describes the US as increasingly deregulated in AI, with government and tech interests aligned, which he says speeds iteration but strains earlier trust norms.
- He cites a deal pushing Saudi Arabia to invest a reported one trillion dollars in AI for a hundred billion back, alongside UAE interest shown in Paris.
- He argues Europe has lost the race for the largest language models and must instead be smaller, slower and more specialized to compete.
- This year's livestream, run by German company Meetyoo, rebuilt the conference environment so virtual attendees feel present in the same room.
Detailed notes
State of AI: China, the US and the rest of the world
Westerheide says China proved itself the clear number two globally over the past months through DeepSeek and Manus, arguing China is quick to take American innovation and make it leaner and more cost-efficient, and is pushing governments and companies toward common AI standards. He says the United States remains number one and will stay there, now largely deregulated as government and technology interests align, which he says speeds iteration even as it strains earlier norms around trust and oversight; he adds that despite this, American companies operating in Germany, often through local teams, continue business as usual. He also points to Saudi Arabia and the UAE as newly emerging funding hubs, citing a deal in which Saudi Arabia is reportedly pushed to invest a trillion dollars in AI in exchange for a hundred billion back, and UAE investment interest shown at the Paris AI summit.
Europe's "good news" strategy
Westerheide says this year's conference theme, "Good News from Europe," is meant to counter negativity, acknowledging he struggled to define it and that asking an AI tool for reasons produced only "random numbers." He argues Europe has lost the race to build the largest language models due to gaps in talent, resources, infrastructure and capital, so its path forward is to be smaller, slower and more specialized, finding niches and being smarter rather than bigger. He frames the many individual company and network success stories in the room, not one large announcement, as the real "good news."
Walking through the day's agenda
He previews the Policy, Society & Strategy stage, opening with a panel on positive developments in Europe, followed by speakers with international perspective and further sessions including Axel Voss of the European Parliament, one of the figures behind the EU AI Act, discussing criticism and improvements to it, and a newly appointed state secretary for digitalization who has long been part of the conference community. He notes the country's digital minister could not attend due to a change in position, calling the existence of a digital ministry itself "good news from Germany." He says that stage closes with a keynote from Hans Uszkoreit, a long-time participant in the community. He then describes the separate Applied AI Stage as focused on execution, scaling and infrastructure, with sessions on longevity, feminist AI and agent systems.
New formats and closing notes
Westerheide highlights a new offline "Cognitive Labs" format, a closed-door, screen-free space starting with a session on software-defined defense, framing AI as a driver for national defense capability through dual-use knowledge. He also mentions an NVIDIA and HPE masterclass on AI factories, and, for the first time, two live podcast recordings at the PIABO lounge. He notes the livestream this year is run by a German company, Meetyoo, which rebuilt the conference environment so online attendees feel present in the same room, and that virtual reality was not used because, in his view, VR and the metaverse never became mainstream. He closes by describing pre-produced postcards, some containing seeds, meant to encourage offline sharing and personal outreach, including sending some to Germany's chancellor.
Quotes
China proved that they are the clear number two in the world.
Fabian Westerheide
We can't compete with the large language models where we lost the game due to talent, resources and infrastructure and capital.
Fabian Westerheide
We will make it, we will continue, but smaller, slower and more specialized.
Fabian Westerheide
Questions answered in this talk
What does Fabian Westerheide say about China's position in AI in 2025?
According to Fabian Westerheide at Rise of AI 2025, China proved itself the clear number two in AI globally through DeepSeek and Manus, taking American innovation and making it leaner, cheaper and smarter, while pushing standards across its government and companies.
How does Fabian Westerheide describe the United States' AI regulation approach in 2025?
According to Fabian Westerheide at Rise of AI 2025, the US has largely abandoned its own AI regulation as government and technology interests align, which he says speeds up iteration even as it strains earlier norms around trust and oversight.
What strategy does Fabian Westerheide propose for Europe to compete in AI?
According to Fabian Westerheide at Rise of AI 2025, since Europe cannot match US and Chinese scale in large language models due to gaps in talent, capital and infrastructure, it should become smaller, slower and more specialized, focusing on niches and many small success stories.