America gets the AI boom. Europe gets the layoffs

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America gets the AI boom. Europe gets the layoffs

Matthew Lynn, The Spectator

Friday, August 14, 2026, 11:13 AM

The management consulting giant Accenture has laid off 11,000 people. The reason? It turns out that a smart chatbot can churn out meaningless waffle about “boiling the ocean” just as well as a recently hired MBA. Oracle has cut more than 20,000 jobs, as it discovered that Claude or ChatGPT could code as effectively as the quiet guy with glasses, while the legal giant Baker McKenzie is laying off as many as 1,000 people after figuring out that a machine could churn out a letter about “the aforementioned party of interest” as effectively as any of their junior lawyers.

America is getting both sides of a process of ‘creative destruction’

Almost every day, another round of white collar professionals falls victim to the AI-driven jobs apocalypse. And yet, while it is real enough, there is a twist that not many people have yet noticed. America will survive it far better than its rivals, while Europe will be the real loser.

There is already a backlash against the number of jobs lost to AI. Only this week protestors stormed the offices of the ChatGPT lobbyists in Washington demanding that they “stop stealing our future.” And yet, it is easy to miss one simple point. It is impacting different continents in different ways. Torsten Slok, the chief economist at the investment giant Apollo, has started tracking the divergence between the French and American labour markets.

The differences are striking. France’s unemployment rate climbed to 8.3 percent in the second quarter of 2026, the highest level since the pandemic, and crucially youth unemployment more than over 21 percent. Over a single year, despite President Macron’s promises to get the French working again, the total number of unemployed French workers has risen by more than 260,000 over the past year. Sure, with its tough labour laws (for employers that is), France may be an outlier. But unemployment is rising in Britain as well, and in Germany, where it rose to 6.4 percent in July and is close to punching through the politically sensitive three million barriers. Right across the continent’s major economies, jobs are scarce.

It is a very different story on the other side of the Atlantic. Sure, some of the recent job creation numbers have been a little disappointing, and the participation rate is sliding as workers drop out of the market. But an AI apocalypse? Not really. The unemployment rate stands at just 4.1 percent, effectively half the French rate, while 103,000 jobs were created in May and June, more than outpacing a slight fall in July. Add in that the United States is also coping with the imposition of tariffs, with all the disruption to supply chains that involves, and a sharp drop in immigration, which creates shortages of workers across a range of industries, and employment is holding up pretty well.

What’s going on? After all, AI should be impacting all the major economies in the same way. You can replace your accounts clerk with Claude just as easily in Birmingham, England, as you can in Birmingham, Alabama, and the paralegal can be switched for Gemini as simply in the old Orleans as in the new one. The roll out of smart chatbots from OpenAI, Anthropic and Google is a global phenomenon, and the rate of adoption by companies, and indeed the public sector, is roughly the same everywhere. It should be hitting everyone equally.

Here’s the explanation. Robots are coming for all our jobs. The labour market in Europe and America are being hit in exactly the same way. The difference is that in America there is also an offsetting boom. In the US, while AI is destroying some jobs, it is also creating lots of them. The American AI giants are on track to spend somewhere between $660 billion and $725 billion on AI infrastructure this year alone, roughly double what they spent in 2025. It is one of the largest ever periods of capital expenditure, perhaps comparable only to the great railway boom of the 19th century. The difference is that while rail building was global, AI is overwhelmingly built on American soil. All that spending ripples out into the wider economy. Indeed, a Brooking Institute report found that in areas where data hubs were being built local employment in roles such as information processing rose by 56 percent. It turns out you can’t spend $700 billion a year without creating some jobs, no matter how high-tech you are.

By contrast, Europe has nothing like the same boom. Capital spending in the EU on AI is estimated at just $46 billion this year, with the Commission in Brussels planning another $10 billion of public money. That is about 8 percent of American spending. Put simply, Europe’s labour markets are taking all of the pain of the AI roll-out, but not feeling any of the gain. Jobs are being wiped out at the same rate, but no new ones are being created.

It is not hard to understand why. The EU’s AI Act has made it virtually impossible for start-ups to try out new technologies. The region’s green policies mean industrial electricity is four times the American price in Britain and Germany, and twice in France. Planning laws make it very difficult to get permission for new data hubs, while employment rules make it prohibitively expensive to hire new people, or fire the ones you no longer need. Indeed, in France or Spain paralegals and consultants will still be sitting idly at their desk long after a chatbot has taken over all their actual work. Add it all together, and the AI boom is simply not happening.

To adopt a phrase from Joseph Schumpeter, America is getting both sides of a process of “creative destruction,” but Europe is only getting one half, and unfortunately it is the “destruction” bit of the formula. America is not escaping the jobs apocalypse. But it is the one major economy in the world that will create as many jobs as it loses, and perhaps creating even more, and many of those jobs will be more productive and better paid. The gulf between American and European economic performance has been widening for the past 20 years. But right now, AI is accelerating that, and it is starting to look as if it will be impossible for Europe to ever catch up.

Written by

Matthew Lynn