Brussels (Brussels Morning Newspaper) October 29, 2026 – Europe retains the technological capacity to compete directly with American artificial intelligence leaders if the region increases investment and private adoption, according to Uljan Sharka, chief executive of Italian technology firm Domyn. Sharka, whose company leads the European Union’s Europa consortium to build an open-source frontier model, warned against relying solely on foreign foundational systems. Meanwhile, new research from Copenhagen Economics commissioned by the Managed Funds Association indicates that EU rules mandating public disclosure of short-selling positions distort share prices and increase market volatility, though the European Commission stated it has no plans to review the existing regulatory framework.
The head of the company selected by the European Commission to develop a homegrown frontier artificial intelligence model has insisted that Europe retains all necessary technological means to build a competitive market proposition against major American technology conglomerates.
Uljan Sharka, founder and chief executive officer of Italian scale-up Domyn, stated that the European technology sector possesses the infrastructure and opportunities required to establish its own position at the frontier of artificial intelligence development. His remarks come amid persistent concerns among European policymakers and industry executives that the bloc is falling behind US-based artificial intelligence developers, including OpenAI, Google, and Anthropic.
Domyn is leading the Europa consortium, an initiative chosen under the European Commission’s Apply AI strategy to construct a 400-billion-parameter open-source frontier model. The consortium has commenced training the system using the bloc’s supercomputing network, with the final release projected ahead of a one-year deadline set for June.
Addressing the current state of European technology, Sharka pointed to significant progress in establishing computational capacity and highlighted regional advantages regarding model training inputs.
“From a technology perspective, Europe has all the means and opportunities to actually build its own proposition in the market. There are no limits for Europe,” Sharka stated. “The only limit is Europe itself in the sense that Europe is not investing enough.”
Sharka noted that Europe’s linguistic diversity—covering all 24 official languages of the European Union—and its deep industrial expertise provide a distinct structural advantage for training data compared to rival international markets.
However, he cautioned European strategy against focusing exclusively on applying artificial intelligence across industrial sectors while depending on non-European foundational technology providers.
“We can have the best factories in the world, but if you don’t have enough electricity, you’re not going to produce anything with those factories,” Sharka explained. “If we build only software, we’re going to have great products, but then someone can cut off electricity and then all of sudden useless. This is why we need to have the models and they need to be open for everyone to be able to control their future.”
Beyond capital allocation, Sharka identified commercial adoption within European enterprise sectors as a major obstacle to growth. He observed that corporate technology leaders across the continent frequently display risk-averse behavior, showing a preference for established suppliers from Silicon Valley over emerging domestic competitors.
“The technical decision makers are still risk averse,” Sharka noted, emphasizing that shifting private sector procurement toward domestic technology providers remains critical to scaling Europe’s technology ecosystem. “That is the real bottleneck.”
Research Criticises EU Short Selling Rules as Counter-Productive
Alongside discussions surrounding European technological competitiveness, separate research has challenged the efficacy of the European Union’s financial market disclosures. A study conducted by Copenhagen Economics for the Managed Funds Association, an international trade association representing fund managers, concluded that EU regulations governing short selling impair share price stability and market operations.
Under the framework established in 2012 following the global financial crisis and the eurozone sovereign debt crisis, investors operating in the European Union are legally obligated to publicly disclose net short positions—speculative bets that a company’s share price will decline—once they reach or exceed 0.5 per cent of a firm’s total issued share capital. In addition, confidential regulatory disclosures are required for positions exceeding 0.1 per cent. The disclosure framework was designed to enhance regulatory oversight without imposing outright bans on short-selling activity.
The Copenhagen Economics report argues that public identification of individual short sellers fosters copycat trading behaviors among market participants and elevates equity volatility, thereby frustrating the original policy objectives of the 2012 regulation.
According to empirical findings detailed in the study, public short-position disclosures are correlated with a 2.9 per cent increase in daily share-price volatility. The research further indicated that market investors were 2.4 times more responsive to publicly disclosed short positions than to non-public regulatory filings, demonstrating a strong tendency toward copycat trading strategies.
“Disclosure lets rivals free ride on the research behind it,” the study’s authors stated, recommending that the European Union reform its policies to publish only aggregated market-wide positions rather than naming individual investment entities.
Divergence in International Regulatory Frameworks
The findings highlight a growing regulatory divergence between the European Union and other major global financial centers regarding short-selling transparency.
In July, the United Kingdom formally abolished the requirement to publicly identify individual short sellers. London replaced the public naming regime with anonymised, aggregated position reporting while maintaining mandatory confidential reporting to financial conduct authorities. This anonymised approach aligns with regulatory disclosure practices used in the United States, Canada, and Australia, where regulators publish aggregated market data without disclosing individual institutional identities.
Despite the findings presented by Copenhagen Economics and market trade bodies, European executive authorities maintain that current rules remain appropriate.
A spokesperson for the European Commission confirmed that the executive branch sees no immediate requirement to revise the 2012 framework.
“The existing regulation has functioned as expected, even during periods of market stress,” the European Commission spokesperson said in an official statement, adding that “there is no evidence that the current framework has reduced market efficiency.”
The spokesperson concluded: “Consequently, there are currently no plans to review the regulation, given that it is performing as expected. The Commission, as always, continues to monitor these markets.”
