Germany’s Finance Minister Lars Klingbeil called on European governments to take a more aggressive and coordinated approach to regulating artificial intelligence, warning that Europe risks falling behind global powers unless it shapes the rapidly expanding technology with its own rules and standards.

AI has "great potential," but enacting "sensible regulation" is a key challenge for Europe if it wants to avoid being dominated by the most powerful figures from the U.S. tech world, said Klingbeil, a Social Democrat who is also vice chancellor in Germany's conservative-led coalition government. He spoke at a press conference on Tuesday.

Apart from their extensive economic power, the U.S. "tech bros" have enormous political power and Europe "has become the battleground" because the companies "know that apart from perhaps the U.S., Europe is the only place that can effectively enact political regulation," he said, in response to a question about Pope Leo's recent encyclical, in which he warned about AI.

"This is a battle ... and one where we must really go on the offensive," he said in Berlin.

"I don't want the future of digitalization to be decided by [Tesla founder and X-owner] Elon Musk or [former Paypal boss and tech investor] Peter Thiel. I want us to have strong European players," he said.

He was open to the suggestion of a digital tax, he said.

The European Commission has launched multiple investigations into the actions of U.S. tech companies such as Apple, Google, Meta and X in recent years, demanding billions in fines.

U.S. President Donald Trump has repeatedly accused the European Union of treating U.S. firms unfairly.