Although the European Union is falling behind the United States and China, Brussels believes the bloc can still compete in the global AI race.

To achieve this, the European Commission said it was mobilising one billion euros ($1.6 billion) to push key sectors like pharmaceuticals, energy and defence, to promote "European AI-powered" tools and develop specialised AI models.

The majority of the one billion euros will come from the EU's Horizon research programme, the EU executive said, and will be used for projects including deploying autonomous cars and advanced cancer screening centres.

Brussels is ploughing billions of euros into developing Europe's AI network including building AI gigafactories and tripling data centre capacity.

Only 13 percent of European companies last year used AI, EU tech chief Henna Virkkunen said, although she said this figure had since increased.

The European Commission wants 75 percent of businesses to use AI by 2030.

"I want the future of AI to be made in Europe. Because when AI is used, we can find smarter, faster, and more affordable solutions," EU chief Ursula von der Leyen said.

Where possible, companies should "favour European solutions", Virkkunen told reporters in the European Parliament in Strasbourg, although she admitted this was not always possible.

In its strategy, Brussels warned "external dependencies of the AI stack" -- the tools including infrastructure needed to build AI -- "can be weaponised and thereby increasing risks to supply chains by state and non-state actors".