Europe’s next industrial leap will be built on digital systems

The next wave of growth in AI chips will come from physical AI applications rather than data centres running cloud services. This means AI that senses its environment, interprets information and acts in real time, for example, in robots, autonomous machines, vehicles, drones, industrial equipment and other embedded systems.

Digital systems are becoming the invisible foundation that sustains modern society. They help machines sense, decide and act. They enable earlier detection of diseases and more personalised care. They also help create a real-time situational picture during traffic disruptions and crises, for example.

All of this requires a range of complementary deep technologies: Advanced sensors observe the physical world. Edge computing processes information close to where it is generated. Power electronics manages energy use. Secure communications and large-scale computing capacity are also essential.

For VTT, this is not a distant technology trend but an essential part of our mission to build Europe’s technological competitiveness and resilience. At the interface of science, industry and society, we turn new digital capabilities into practical solutions that are high-performing, scalable, secure and sustainable.

Finland and Europe have strong expertise in microelectronics, telecommunications, high-performance computing and quantum technologies. The next step is to combine these areas of expertise into reliable, industrially scalable and impactful systems where they matter most. 

Devices that use physical AI must sense their environment, interpret signals in real time and operate safely under changing conditions. This requires advanced sensors, edge AI chips, embedded software, secure control systems and energy-efficient power electronics.

Health technology solutions require reliable data. Diagnostics, wearable devices, imaging, remote monitoring and smart hospital systems rely on data collected from the human body and the care environment. Value is created when data is collected accurately, analysed close to the patient when necessary, and protected throughout the system. Advanced sensors, energy-efficient electronics and reliable edge computing can make care predictive, personalised and accessible.

Defence and security applications demand speed, precision and security. Modern defence capability relies on distributed sensing, autonomous platforms, interference-resistant communications, electronic systems and rapid interpretation of data. Systems must operate securely even under disrupted conditions, with limited connectivity and scarce energy. Therefore, edge computing, resilient power electronics and sovereign microelectronics are essential to performance, resilience and strategic autonomy.

Once data has been generated, it must be transferred and integrated securely.

Future digital systems will rely on heterogeneous networks connecting devices, factories, hospitals, vehicles, defence platforms and satellites. Terrestrial 5G and 6G networks, industrial networks, cloud services and satellite links must function as one resilient whole.

Space-based connectivity complements terrestrial networks in remote operations, maritime and Arctic environments, crisis management and defence. At the same time, they transmit valuable Earth observation, positioning and timing data. The challenge is to integrate connectivity and data into secure, application-specific systems that operate across borders and under varying conditions.

Large volumes of data are transferred efficiently using light in optical cables. Europe must develop technologies suitable also for critical operating environments - technologies that are fast, reliable and energy-efficient. 

Physical AI, health technology and defence generate ever-growing volumes of complex data. Some of it must be processed immediately close to where it is generated, for example in a device or local system, while some is stored for later use, AI model training and simulations.

Europe’s AI gigafactories provide large-scale computing capacity for this purpose. According to the European Commission, they will increase access to the infrastructure needed to train, fine-tune, run inference with and deploy advanced AI models. At the same time, they will strengthen Europe’s technological autonomy and demand for European semiconductors.

Future computing will combine high-performance computing, AI and quantum computing into hybrid systems. VTT strengthens the quantum technology ecosystem, develops quantum computing algorithms and invests in the development of new technologies needed to scale quantum computers.

Finland has progressed from its first 5-qubit system to 20 qubits and the current VTT Q50 system. IQM has delivered a 150-qubit superconducting quantum computer to VTT, and it is currently being installed. This is an important step towards a 300-qubit system. The systems will be connected to Finland’s high-performance computing infrastructure to support hybrid computing.

For industry, the essential question is not which technology will prevail, but how AI, high-performance computing and quantum computing can be combined into functional solutions.

AI learns from data, high-performance computing simulates and optimises systems, and quantum computing may offer new solutions for areas such as optimisation, materials development, chemical processes and machine learning when classical methods reach their limits. 

In next-generation digital systems, success will favour those who master the entire technology stack and take new chips, components and systems from the laboratory to piloting and production. Sensors, edge computing and power electronics enable systems to sense their environment and operate efficiently. Connectivity carries the data, while AI gigafactories refine it into models, simulations and new knowledge.

VTT develops the entire technology stack together with industry, startups, the public sector and European ecosystems. We turn scientific breakthroughs into digital systems that create new business and strengthen competitiveness, self-sufficiency, resilience and security.

Our experts and technology environments help companies turn scientific breakthroughs into working concepts, pilot production and commercial manufacturing.

Europe’s digital sovereignty will not emerge from individual technologies, but from functional solutions in real-world operating environments. VTT brings together the technologies, partners and research environments needed to enable solutions to be deployed at scale.