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FDI Faces Turbulence: Security Trumps Efficiency
19 Dec, 2025
Summary
- FDI priorities shift from efficiency to security and resilience.
- Europe faces significant FDI decline in 2025 and 2026.
- AI investment is a growing exception amidst European decline.
The global foreign direct investment landscape has been profoundly reshaped by a year of political and economic instability. Security, resilience, and strategic advantage now outweigh efficiency as primary investor considerations. This evolving paradigm of "strategic capitalism" sees nations actively directing investment to bolster national security and technological capabilities.
Across Europe, a significant decline in FDI project volumes is anticipated for 2025 and will likely persist into 2026. Investor decisions are increasingly hampered by U.S. tariff measures, ongoing regional conflicts, political instability in countries like France, and a generally weak economic climate.
Despite this downturn, investment in the artificial intelligence industry is showing strong momentum across various sectors. Western Europe, with its robust research and development infrastructure and skilled workforce, remains a key hub for international companies establishing advanced research and engineering centers.
