Europe wants to break up with US tech. Here’s how it plans on doing that.

Last year, President Trump’s erratic trade policies served as a wake-up call for European leaders. As US Big Tech companies aligned themselves close to President Trump and an ongoing global AI race stoked fear of entire economies falling behind, the EU decided it needed a strategy to ensure its own “digital sovereignty.”

The recent tensions between the Trump administration and EU member states related to Trump’s desire to annex Greenland only underscore how vulnerable Europe is to potential threats and intimidation from the US. As the Trump administration exerts tighter control over private tech companies, Europe’s American tech dependency could be weaponized.

According to a 2024 report on EU competitiveness by former European Central Bank President Mario Draghi, in 2021 the three big US cloud providers — Amazon AWS, Google Cloud, and Microsoft Azure — made up 65% of the European cloud computing market, while EU-based providers had only 16%.

Europe has little control when US companies run afoul of EU rules. Despite several high-profile fines, Europe’s strategy of using tough regulations to keep US tech companies in check hasn’t had a great success rate. Afraid of falling behind on AI to the US and China, there is a movement to relax Europe’s strict data privacy and AI regulations to allow for European companies to better compete on the world stage.

Building the EuroStack

To lessen this reliance on US tech, EU leaders set out to create an alternative tech “EuroStack” that could replace American tech with home-grown European alternatives for AI, cloud computing, software, and hardware. Over the past few months, EU officials have embraced the plan and fleshed out details of the ambitious initiative.

EuroStack is a nonprofit foundation that seeks to advance the shift to such a Euro-centric tech stack. EuroStack founder and Chair Cristina Caffarra says that today Europe finds itself as a “digital colony” of US tech companies, and that a pragmatic approach should be taken to bolster the existing tech industry in Europe. Caffarra told Bloomberg that the EU should redirect European capital flowing to US Big Tech companies to invest in Europe’s tech industry.

But achieving the kind of digital sovereignty that Europe is seeking will require more than just building a few apps and platforms.

EU energy crunch

Around the world, it has become clear that one of the key bottlenecks to wider AI investment is cheap, reliable energy. That’s a big problem that could dash dreams of European data centers rivaling the massive projects already under construction in the US.

Europe’s high energy costs spiked after the Russian invasion of Ukraine, and while renewables are growing fast, they haven’t been able to replace the demand for natural gas previously supplied by Russia.

But the next wave of AI development doesn’t necessarily look like the first one that was ushered in by the release of ChatGPT in 2022. Efficient inference (running the models) is now taking precedence over training large frontier models from scratch. And it is possible that the EU’s slower AI development could insulate it in the case of a bubble, but it could also relegate the region to a long-term second-tier status.

Sovereignty without Silicon Valley

Rather than trying to build European versions of Silicon Valley giants, EU policymakers are leaning into a different strategy: open-source software. To enable better collaboration across EU borders and between the public and private sectors, the EU created the “Digital Commons European Digital Infrastructure Consortium.” The framework allows countries to build shared digital infrastructure, and helps facilitate open-source projects that can provide European alternatives to foreign tech platforms.

The aim of the strategy is for the EU to avoid having to build its own Microsoft or Google if it can use free, open-source software that can help reduce dependence on foreign tech.

European tech companies are following the lead of the initiative. German tech company Schwarz Digits announced an €11 billion ($13 billion) investment in a new 200-megawatt data center in Brandenburg, Germany. German enterprise software giant SAP recently announced a partnership with France’s Mistral AI to develop sovereign AI for Europe. And the EU launched a $237 billion “InvestAI” initiative to bolster the region’s AI investments, which includes $24 billion for European “AI gigafactories.”

While America has Nvidia, the world’s most successful AI chip designer, Europe is home to ASML — the only company that has mastered extreme ultraviolet lithography, which can make the world’s smallest and most detailed chips. ASML makes advanced tools for chipmakers TSMC, Intel, and Samsung. ASML recently announced a $1.5 billion investment in Mistral AI and a strategic partnership with the company.

In her State of the Union address last year, European Commission President Ursula von der Leyen said this was Europe’s moment for independence, “to take control over the technologies and energies that will fuel our economies. To decide what kind of society and democracy we want to live in.”

Von der Leyen highlighted the importance of AI to this effort:

“AI will improve our healthcare, spur our research and innovation, and boost our competitiveness. We want AI to be a force for good and for growth. We are doing this through our own European approach — based on openness, cooperation and excellent talent.”