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We are meeting and talking at a moment where there is a lot of focus here in Europe on the decision by the US to impose export controls on anthropic models. And Europe is feeling the impact of that. And it's a reminder of the questions around sovereignty, particularly around AI. And you are pushing hard on this. What is your message to Brussels? What is it that Europe needs to do to ensure that it is not vulnerable to those kind of supply chain risks?
Well, I think indeed there is a lot of discussion around that. And sovereignty has become a key word because people realize that strategically, if you don't have a big enough part of a certain ecosystem, in this case, AI, you're going to be exposed to the goodwill of other parties. But I think that's very important to understand when it comes to sovereignty is to get sovereignty. You need innovation first. You have to do things in the right order. It's not enough to say, I want sovereignty. What's very important is make sure that innovation can happen in Europe. And I think that's a bit the idea of the tech creator's group we have created, where we believe that it is very, very important to have a dialogue with the different government commission, but also national governments, to help them to understand how to create the condition such that the AI ecosystem can develop in Europe. You will never have the entire ecosystem, but you cannot do it all. It's too much or you cannot do it all at the same time, but you need at least to have enough skin in the game, in a value in the ecosystem, so that when those discussion or those decisions happen, you have to.
Where can Europe have skin in the game? They've got skin in the game where they smell and the role that you play. Yeah. Where else can you have skin in the game when it comes to AI?
Well, I think a very important place is the market itself. The European market is pretty attractive, right? You look at 22% of GDP. It's a very, uh, I would say, uh, mature market. Very good market. So this means we are users. We are buying a lot of stuff. And that's to start with a train for Europe. And I think that's a reason why Europe was created. Now if you look at the other part between maybe a small and that, uh, we have a lot of horse and sometime we discuss a lot semiconductor manufacturing. Yes, there is a gap there, but most probably not the right place to start, because semiconductor manufacturing is only needed if you have people to buy a semiconductor. Today, if we had a two nanometer fab in Europe, most probably most of the wafers will go to the US. So since we have a strong market, we have to start by looking at that and focus on what we call the market demand product and have strong industrial project around AI application around maybe AI product, then maybe, uh, chip design and then chip manufacturing. But you have to look at the entire sequence. And look at it in the right order.
How would you how would you score Europe right now on a score of 1 to 10? In this AI race.
Well, I think I've said that before. I think that, you know, if we compare, uh, all we do on the entire ecosystem versus the U.S. and China, I think today the US is a clear winner. I mean, they are, um, looking at champions across the entire AI semi ecosystem. I think the one place they were missing a bit out was manufacturing. And I think they have been extremely aggressive in bringing some key uh, companies to manufacture in the US. They can do that because they buy chips. 80% of the advanced chips manufactured worldwide is bought by the United States. So I think the US is doing very, very well. China has been investing also across, uh, the entire ecosystem. I think most really they they do very well on the application side, uh, a bit less on what's before that. But I think they are driving the use of AI, uh, most probably more aggressively than any other country. And again, when you look at Europe, a lot of horse. So I would say, you know, how is that really quite behind what's happening elsewhere today. So that that gap is obviously there.
How interventionist should European governments be? The US taking a 10% stake in Intel. Is that a a playbook that we should copy?
Well, I think two things maybe. So the first thing we need to have a dialogue between the industry and government. Government is to really develop instruments, regulation or lack of regulation in some cases to make the industry champion life a lot easier.
I want to ask you about the IPOs that come through SpaceX, notably, and possibly OpenAI and Anthropic coming up into the future. Are we underestimating the CapEx spend that could come about as a result of that capital raising, and what it means for the demand for your lithography machines?
Well, if you look at, uh, you know, uh, worldwide, uh, the demand for, uh, AI infrastructure is still enormous. And the demand for, uh, AGI age computers start to come up. So the demand is continuing to go up. I think a lot of us, uh, are convinced that we're going to be looking at a supply limited market for AI, for semiconductors for quite a few years, because the build-up of the infrastructure is is huge. And I think some of the IPO you mentioned are just pointing to the opportunity that the AI is represented.
Are we are we early in this still where are we in in that in that sequentially? Because, uh, you know, even a year ago, uh, the AI companies, we're already very vocal about the need for this architecture, the need to build up capacity. My industry, the semi industry was still a bit hesitant to move. And the move really happened basically at the end of last year and very quickly. And now we all need to build capacity so our customers will have to build fabs. We have to make sure we build enough equipment to fill those fabs. Yeah. And to catch up will take quite a bit. That's only for the infrastructure. And then the application will come.
I using a pull forward of orders for your TV and AV machines from customers. We see uh, a pull. We see customers continuing to create visibility longer term visibility telling us well, this is a bit here to stay. So I would say that the trend we see is still very strong towards basically demand.
Ron, with me on this one. Data centers in space. Is that is there a potential additional revenue stream for for ASML if Musk pulls that one off?
Well, I think, you know, you need a certain amount of data centers. And they would be in space. They would be on the Earth. It doesn't necessarily change the number. I think the discussion about data centers in space is to maybe address another potential, uh, bottleneck in the ecosystem, which is energy. I think the discussion around putting data, etc., in space is there because there is an idea that if you do that, the energy consumption or the energy availability will be there. So maybe not too much to do with, you know, the total data center capacity, but maybe more about trying to solve another potential big issue, which is energy for data centers.
Elon Musk is also looking at a Terra fab plan, potentially one terawatt of power. What's the potential upside for ASML on that? Have you talked to Musk about that project? Is that is that a potential uplift as well for the business going forward?
Well, you know, you know, any added capacity of of of course, a potential upside for uh, for us. I think we are looking very carefully on the development on when things will happen. At what speed. Um, you know, new projects are opportunities as long as you not to play limited. So that's that's also important to to say that. So we have to make sure that this is already being taken care of. But I think the Terra fab is, is an example of a major fab project. If you look at some of the DRAM projects in Korea, you also look at millions of wafers. Yeah, fabs. So that's also pretty big.
Okay. So Korea and the build-out there is going to be a driver as well. Um, staying with the US so that one of the top House Republicans on the the House China Committee sent a letter in April suggesting that ASML was going to start shipping DUV lithography machines into China. They have some concern that you do have a response to to that.
No, it's not a response because, you know, we have a data with every government. And I think, you know, that in the last few years we have been subject many, many times to, uh, those kind of, uh, negative rumors about what we do. I mean, every time the rumors have been quite, uh, I would say potentially a hurtful event for for ASML and I want to say it again. I mean, we have been following every single rule and we continue to do that, though without changing, by the way, quite often and sometimes something you could do you cannot do anymore. But when this happen, you know, we change our behavior accordingly. So we are extremely cautious in trying to follow or follow basically the rule of laws. It's very important. And it's true for DUV. That's true for EUV. That's true for any activity we have in China or anywhere else in the world. And I can promise you, there's a lot of people in ASML making sure that we comply. Compliance is a very important, uh, I would say, element in, uh, in a very difficult geopolitical environment.
The Indian Prime Minister, Narendra Modi, will be here in Paris tomorrow. Yes. You've partnered with Tata. Yes. On their aspirations around foundries and build-out a semiconductor capacity in India. How much of a growth story potentially is India? For for ASML.
Yeah. So I think so first we're very happy with this partnership. Um, because we are partnering at the very start, at the very beginning. So of course we all know that India today doesn't have manufacturing for semiconductors. But you know, by 2030 they believe that 10% of any chips would be used by India. And like anyone else. That becomes therefore a strategic question of supply. And therefore they want to get their factories. So first fab will come up next year. A lot of learning has to happen and we will help India Tata for this partnership to accelerate their learning. And you know, as learning gets successful, you grow the opportunity. So we're very happy to start now because we look at that as a growing opportunity for the not the next two years, but for the next five and ten years, uh, in India. And we're very happy that we had this from the start.