This week, for a few days at least, Paris has become the central node of the global AI conversation. “Le Chat”, Mistral AI’s new LLM chatbot, has overtaken its American and Chinese counterparts on the Apple Store, in a largely unexpected breakthrough for European tech. The Paris AI summit which began on Monday has attracted tech moguls such as OpenAI’s Sam Altman, as well as politicians ranging from US Vice President JD Vance to European Commission head Ursula von der Leyen.

But the star of the show was Emmanuel Macron, who announced an €109-billion investment package in AI, with 35 sites identified for immediate data centre development, and proclaimed that France was “back in the AI race.”

France has a surprisingly large number of assets in the AI global race. The founders of Mistral AI met in France’s prestigious École Polytechnique engineering school, while the quality of the country’s top engineers is no secret in Silicon Valley or Wall Street. “AI godfather” Yann LeCun was born in the impossibly French-sounding town of Soisy-sous-Montmorency. If France manages to keep these assets home, it will have some of the most skilled foot soldiers in the global AI race.

This effort can be powered by France’s cheap and bountiful nuclear energy, which generates two-thirds of its national energy supply. Deemed to be antiquated not long ago by its political elites — Macron himself had campaigned in 2017 to denuclearise France’s energy production and shut down a nuclear plant — nuclear energy turns out to be invaluable in powering electricity-hungry AI data centres. As Macron quipped at the summit: “I have a good friend in the other part of the ocean saying ‘Drill, baby, drill.’ Here there is no need to drill. It’s just plug, baby, plug.” Despite an ageing nuclear park in dire need of renovation, France exported 90 terawatt-hours of electricity last year and will dedicate one gigawatt of nuclear power for AI.

For Macron, Mistral’s breakthrough is a welcome opportunity. With his minority coalition government hanging by a thread over acrimonious budget discussions, and as he increasingly resembles a lame duck ahead of the 2027 presidential elections, the French President will be looking for some bold projects to establish his legacy.

This desire was fully apparent in Macron calling for a “Notre-Dame Strategy” for AI in France and Europe, referring to the rapid reconstruction of the cathedral after the hugely destructive 2019 fire. Yet this comparison also highlights lingering structural barriers to France’s economic development. The reconstruction of Notre-Dame in only five years was a small miracle, but one made possible by the French state deciding to waive much of the red tape and bureaucratic hindrances that have smothered other ambitious projects. Only last year, a semiconductor factory saw its extension project blocked in Grenoble over environmental concerns.

Another potential self-imposed constraint on Macron’s AI ambitions will come from the EU. The mantra is now well-known: America innovates, China replicates, and the EU regulates. Only a few days ago the EU seemed doomed to watch Beijing and Washington dominate the tech race, with the Brussels AI Act its only contribution to this struggle. In the last few months, though, the EU’s regulatory passion has been under fire, with former Italian prime minister and European Central Bank president Mario Draghi lambasting it in a landmark report. It remains to be seen how the AI Act — a fantastically dense and complex piece of legislation — will impact the development of AI in the EU.

What’s more, France lacks the financial firepower of the US to push these large projects. For all of Macron’s celebration of Le Chat as a tool for European tech sovereignty, most of the €109-billion investments announced are coming from foreign funds; €50 billion alone will come from the United Arab Emirates. In recent years, many French tech start-ups have hopped over the Atlantic to tap into the much larger American capital market.

With budget negotiations looming in the background, and with a return to the EU target of a 3% deficit nowhere in sight, this AI breakthrough constitutes a painful reminder for French elites. The inability of the political class to clean up its finances means that the country lacks the fiscal space to deal with tomorrow’s crises, or to invest properly now in the technology of the future.