This week it became known that the Dutch chipmaker machine company ASML invested a substantial sum in EU startup Mistral AI.

ASML is one of Europe’s most valuable tech companies, valued at $264B.

But what does ASML do exactly? Well, it builds machines that produce chips. ASML is the only company in the world capable of producing the complex, highly advanced systems that enable chipmakers like TSMC, Samsung, and Intel to produce the smallest, fastest, most energy-efficient <2nm chips.

In comparison: your car would use >28nm chips. Many companies produce such chips.

Sub-2nm chips pack billions of tiny transistors into a space smaller than a fingernail. These chips are much more powerful, with very little energy use. Your iPhone uses such chips. But they are also in data centres that train AI models.

Which brings me to the following.

ASML has not only invested in Mistral AI but will also sit on their board. What advantages could a synergy between a chipmaker machine company and an AI startup bring?

★ Mistral AI can share insights into the hardware requirements of next-generation AI models, so ASML can develop even more sophisticated chip-making machines.

★ Their expertise can help ASML’s customers build faster, more energy-efficient processors tailored for AI tasks. But help also by using AI to improve processes.

★ Having ASML on the board of Mistral AI means that they could make sure that AI development aligns with chip technology. Mistral could influence ASML’s roadmap to better support AI.

But.

ASML might have the monopoly on the world’s best chipmaker machines, in the EU, we can't ourselves produce the <2nm chips. Actually, looking at ranking, under Taiwans TSMC, South Korea’s Samsung, and Intel of the USA, there's nothing. China is producing 7nm chips, Japan is working on it.

And the EU? The EU has its Chips Act.

This Act aims to strengthen the EU chip industry, reduce dependencies on foreign suppliers. Budget: €43B. Out of the many initiatives, one <2nm production facility is planned. The US company Intel is to start production in Magdeburg, Germany, by 2027. Using machines built by ASML.

There’s a catch though.

In ASML’s machines, one very crucial component is US-made, the light source. This component is one of the most advanced technologies in the world. Developing systems to produce it locally would take decades and hundreds of billions.

Even though ASML is based within the EU in Velthoven, NL, and the new <2nm fab is just down the road in Magdeburg, DE, the US government could stop ASML from using this crucial component. And we have seen what the increasingly erratic US president can do.

So, while the investment of ASML in Mistral AI is an encouraging sign, it's just a small step. And the threat of the US pulling back from 80 years of common values is very real.