Cabinet ministers are turning on Ed Miliband, accusing him of blocking AI investment to protect Net Zero – while families pay the price in lost jobs and holidays.
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A Ukrainian drone attack has reportedly forced the closure of a Yandex data centre in Russia’s Ryazan region, causing a fire and disrupting part of the company’s infrastructure. Shares in the Russian technology group fell by more than three per cent in early Moscow trading on Thursday, 8 October.
The installation in Sasovo was affected during overnight strikes on Russian territory. Yandex said it was working to restore affected infrastructure, while its principal consumer services remained operational. The incident has raised questions about the vulnerability of Russia’s digital economy to Ukraine’s long-range strike campaign.
The affected data centre began operating in 2014 in buildings formerly occupied by the Sasta machine-tool manufacturing plant. Yandex subsequently connected the installation to Moscow by fibre-optic communications links as part of its wider computing infrastructure.
Ryazan regional governor Pavel Malkov said Russian air defences intercepted two drones over the region. He reported a fire on the roof of an industrial building in the Sasovo district and damage to windows in nearby private homes. No casualties were reported.
According to a statement on the incident, the situation had been brought under control while work to restore infrastructure continued. Yandex said its main consumer services remained operational.
The company’s cloud division also reported an electricity supply problem affecting an availability zone known as ru-central1-b. Clients were advised to use alternative zones where necessary to maintain service continuity.
Yandex shares dropped by approximately 3.4 per cent to 3,568.5 roubles in early trading on the Moscow Exchange. The decline followed news of the fire, although a single trading session cannot establish the long-term financial cost of the disruption.
Yandex operates search, advertising, navigation, artificial intelligence and cloud computing services. Its infrastructure therefore supports commercial users as well as the company’s own applications. The duration of the interruption, the extent of physical damage and the cost of repairs will determine the wider impact.
Investors can follow the company’s quoted share price as further details emerge.
In a separate development, explosions and a fire were reported on Thursday near the Gazprom Neftekhim Salavat refining and petrochemical complex in Russia’s Republic of Bashkortostan, around 1,400 kilometres from the Ukrainian border. The precise location of the fire and the extent of damage had not been independently established.
The Gazprom-owned complex processes hydrocarbon feedstock and produces petrol, diesel, fuel oil and petrochemicals. It has previously been targeted by Ukrainian drones. The latest reported incident comes amid repeated attacks on Russian refining and fuel infrastructure.
Ukraine’s long-range economic campaign has focused heavily on oil refineries, fuel stores, military production plants and transport infrastructure. A strike affecting a major data centre introduces another category of vulnerability: the computing equipment and supporting utilities used by the digital economy.
Such sites serve businesses, financial institutions and industrial enterprises, and can also support defence-related activities. However, no publicly verified evidence establishes that the Sasovo data centre was directly involved in Russian military operations.
Damage to power supplies, cooling systems and network connections can interrupt services without necessarily destroying servers. Operators with geographically distributed facilities may be able to shift workloads to unaffected locations. The suspension of one centre therefore does not mean that Russia’s internet infrastructure has ceased functioning.
The attacks coincide with Russia’s plans for substantial military expenditure in 2027. The draft federal budget envisages considerable government spending and borrowing as Moscow continues its war against Ukraine.
Ukraine’s strikes on economic infrastructure are intended to increase the cost of maintaining Russia’s invasion. Disruption to energy facilities can affect fuel production and revenue, while attacks on technology and industrial sites may interrupt wider commercial and logistical operations.
The cumulative effect depends on the severity and duration of the damage. Neither the reported temporary closure of the Yandex facility nor preliminary accounts of the Salavat fire establish the scale of lasting losses.
The incidents nonetheless illustrate the exposure of Russian industrial and technology assets far beyond the Ukrainian border, as Kyiv increasingly targets infrastructure that supports the country’s economy.
The installation of two mega data centres in the municipality of Abrantes raises “serious doubts about their environmental impacts, namely with regard to energy consumption; the quality and availability of
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Europe’s artificial-intelligence problem is changing. The immediate issue is no longer whether European companies will use AI. They already are. The harder question is how they are using it, how quickly successful companies can scale, and where the economic gains from the technology will ultimately be captured.
The latest figures show rapid adoption. In 2025, 20 per cent of EU companies with at least 10 employees were using artificial intelligence, up from 13.5 per cent a year earlier. Among large companies the figure reached 55 per cent. Denmark led at 42 per cent, followed by Finland at almost 38 per cent, while Sweden and Belgium were both at about 35 per cent.
Those numbers describe adoption, but not how deeply AI has been integrated into companies.
Kristalina Georgieva, managing director of the International Monetary Fund, drew a distinction during a meeting of EU finance ministers in Dublin on 21 September. US companies are increasingly using AI to overhaul entire business processes, she said, while European companies tend to apply it much more narrowly.
This is where the productivity gap becomes important. Replacing a particular administrative task with an AI tool may cut costs. Redesigning production, logistics, customer management and decision-making around the technology can alter the economics of an entire company. The IMF estimates that AI could eventually add between 0.1 and 0.8 percentage points to annual global potential growth.
Europe already has weaker productivity growth than the United States. If American businesses extract more output from the same technology because they reorganise around it more quickly, AI could widen rather than reduce that difference.
Capital is accumulating heavily in the United States.
The 2026 Stanford AI Index puts US private AI investment at $285.9 billion in 2025 — more than 23 times the $12.4 billion recorded for China. In generative AI, American investment exceeded the combined total for China and Europe by a wide margin.
Europe does not lack start-ups or technical expertise. Its difficulty becomes more pronounced when companies need large amounts of capital to move from promising businesses to international competitors.
A European Commission-backed examination of AI financing found that European investors provide most funding for EU AI start-ups in rounds below €10 million, but their participation falls to 26 per cent in deals above €25 million. Much of the late-stage financing instead comes from the US and UK.
The problem extends beyond AI. The European Investment Bank has found that EU scale-ups raise only about half as much capital as comparable Silicon Valley companies. Companies that cannot find sufficient growth capital in Europe often turn to foreign investors, buyers or stock markets.
Europe can therefore produce technology without necessarily retaining the companies that turn it into large businesses.
Brussels is attempting to address another part of the problem through infrastructure.
Under the EU’s AI Continent Action Plan, the Commission is expanding AI factories based around European high-performance computers and plans larger AI gigafactories. InvestAI is intended to mobilise €20 billion for the gigafactory programme alone.
Compute, however, cannot be separated from energy.
Data centres already consume around 3 per cent of European electricity, according to the IMF, while AI-driven demand could triple by 2030. EU Today has previously examined how the Commission’s push for greater computing capacity is colliding with electricity, grid, water and permitting constraints across Europe.
The shortage of computing capacity is not uniquely European. A reported dispute over access to Google’s Gemini models showed that even the largest US technology groups can encounter limits on available AI compute. Europe enters the same contest with fewer hyperscale cloud providers, less domestic frontier-model infrastructure and high industrial electricity prices.
The AI Act inevitably occupies much of the European debate. Most of the framework entered a new enforcement phase in August, although EU institutions have delayed important obligations covering high-risk systems. As EU Today reported following final Council approval, some high-risk requirements will now apply from December 2027 and August 2028.
Regulatory costs can affect investment and the speed at which companies introduce new products. They are not, however, a complete explanation for the transatlantic gap.
Changing the AI Act would not on its own produce deeper European capital markets, cheaper electricity, faster grid connections or larger technology companies. Nor would lighter regulation ensure that European businesses redesign their operations around AI.
Europe retains considerable strengths. Seven of the ten highest-ranked countries in the IMF’s AI preparedness index are European. The continent includes semiconductor-equipment leader ASML, advanced research centres, industrial engineering expertise and sectors such as pharmaceuticals, aerospace, automotive manufacturing and machinery where specialised AI can generate substantial productivity gains.
The problem is converting those assets into economic scale.
Europe has spent several years developing rules for artificial intelligence. It is now building computing infrastructure and trying to mobilise capital. The next stage will take place largely outside Brussels: inside companies deciding whether AI is another software tool or a reason to redesign the way they operate.
If European firms remain users of predominantly American models and infrastructure while US companies capture most of the investment, scaling and productivity gains, rising AI adoption will not by itself close the gap.
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