Can Europe free itself from US digital dominance?

Benjamin Revcolevschi, an engineer by training, never imagined that one of his future jobs would involve meeting with digital technology ministers from EU member states almost weekly.

But the CEO of OVHcloud , a cloud computing services provider, is capitalizing on the new wave of political interest. EU leaders are increasingly aware of Europe's dependence on US tech companies for the infrastructure they power, from healthcare systems to defense.

"We've been discussing sovereignty for 20 years," says Revcolevschi. But since Donald Trump's election as US president, the tone of the conversations has changed, he adds. "We're in a truly different world."

Europe is facing questions about Trump's long-term commitment to NATO and his tendency to mix up issues as diverse as trade, defense, and regulation in negotiations.

Trump has fueled concerns among European governments and companies about privacy and data access, and has raised fears that the US could suspend or completely block the operations of American technology companies in Europe.

Absolute domain

These operations are deep and extensive. Amazon, Microsoft, and Google control more than two-thirds of the European cloud market. Google and Apple dominate smartphone operating systems in the EU, while Google monopolizes the search market. OpenAI's ChatGPT is the leading AI chatbot on the continent, while the social media platforms used by millions of Europeans are predominantly American.

As in the field of defense, transatlantic technological dependence has become a geopolitical burden, intensifying long-standing calls for Europe to invest more and even favor its own companies in public procurement. In a symbolic nod, Henna Virkkunen , who took over the EU's technology portfolio in December, has added the term "technological sovereignty" to her title.

The Finnish leader wants to focus on European independence in areas such as quantum computing, AI, and semiconductors. "These technologies are considered critical, and it's important that we develop our own capabilities," she told the Financial Times .

Max von Thun, director of the Open Markets Institute, says that the "instrumentalization" of technological dependencies by governments and the market dominance exercised by US technology groups "have illustrated like never before the need for Europe to foster an independent, open, and resilient local technology sector."

But as Europe moves from analyzing the problem to proposing possible solutions, such as favoring European tech companies over those from the US, it must also grapple with its own lack of alternatives. Only a few of the world's top 50 tech companies are European . Tech startups in the region also face regulatory uncertainty, fragmentation, and a lack of financing options for their growth , especially venture capital.

In a landmark report on EU competitiveness, former Italian Prime Minister Mario Draghi clearly demonstrated last year that Europe's productivity gap relative to the US has widened, primarily as a result of the EU's weakness in emerging technologies.

For Andy Yen, founder and CEO of Proton , the Geneva-based group behind ProtonMail and other privacy-focused apps, the debate over boosting local tech groups is precisely about this.

"If we don't invest in technology in Europe, we're simply giving up on the main engine of economic growth," says the Proton CEO. "These are the companies that will create the well-paid jobs, high profits, and income that will allow us to fund the social system."

Mistral AI

France's Mistral AI exemplifies Europe's struggle to capitalize on next-generation technology. Once hailed as a potential global leader in AI, it has lost ground to US-backed rivals backed by Big Tech and, like almost everyone else, was surprised by the capabilities of China's DeepSeek. Meanwhile, the EU is struggling to balance the challenge of regulating AI with the need to attract sufficient investment and talent to boost its computing power.

Cloud computing is an immediate priority to reduce dependence on US technology groups. As more governments, businesses, and citizens move data from local servers to a cloud-based environment, data centers and their associated cabling have become critical infrastructure.

US companies dominate the European cloud market, raising concerns among European policymakers and industry leaders that US legislation, particularly the Cloud Act, could encourage the Trump administration to exert greater influence over European data , even if it is stored on servers located in Europe.

This is worrying because Washington has also shifted from complaining about EU regulation and enforcement measures in technology to questioning those decisions and "combining this with threats around tariffs, sometimes even linking them to security decisions that could negatively affect the continent," says Zach Meyers of the Centre on Regulation in Europe think tank .

Key institutions, including the European Commission, are in talks with groups like OVHcloud to move some of their cloud services managed by US companies to them in order to improve Europe's digital autonomy.

New European law

Later this year, the European Commission will introduce a new law aimed at addressing the region's capacity gap in cloud and AI infrastructure, with measures to increase the secure processing capacity of EU cloud providers.

EU officials are still considering whether and how to include "buy European" provisions in the legislation, which would favor EU companies over U.S. ones, without violating the World Trade Organization's agreement on government procurement , which requires that domestic and foreign bidders be considered equally.

Proponents argue this would divert investment toward European tech companies, help boost the tech ecosystem across the bloc, and accelerate the creation of alternatives to US suppliers.

Alexandre Roure of the Computer and Communications Industry Association (CCIA), whose members include many large technology groups, says the debate over strict market access restrictions for non-EU tech companies "only distracts policymakers from the real task : achieving a functioning digital single market with clear, simple, and practical rules."

This is increasingly likely to be the direction Europe will take. The bloc has already announced that it wants EU governments to exclude foreign bidders from public tenders in its upcoming public procurement directive, which Stéphane Séjourné, Commissioner for Prosperity and Industrial Strategy, has dubbed the Buy European Act.

Séjourné, a former French foreign minister and close ally of President Emmanuel Macron , once said he considered favoring European bidders in public procurement a "first step."

While he declined to confirm that he would push for such clauses in the next cloud initiative, Séjourné stated that action was needed in areas of the private sector where Europe is completely dependent on one country.

Big Tech Response

Marc Ferracci, the French Minister of Industry, was more specific, telling reporters that the "buy European" clauses should apply to critical industries, adding that, for him, "cloud data centers, especially server infrastructure, are crucial."

Faced with the prospect of the playing field shifting against them, big tech companies are putting up a fight. In recent months, Microsoft, Google, and Amazon have announced so-called sovereign cloud offerings, designed to keep data and operational control within a specific geography, in order to reassure their European customers.

Microsoft 's chief legal officer has stated that, if necessary, the company will sue the US government to protect European customers' access to its services, positioning itself as a "source of digital stability during a period of geopolitical volatility."

Google is implementing isolation solutions, where a customer's data doesn't have to be connected to other networks, and strengthening its sovereign cloud options in the EU. Amazon has introduced new sovereign controls and established independent governance in its European organization.

In private conversations, several lobbyists and executives from the big tech companies also express confidence in their ability to continue dominating the European market, given the scarcity of local alternatives and the lack of urgency among many consumers.

For Roure of the CCIA, true sovereignty is more a matter of managing dependencies by expanding freedom of choice. "The priority should be to prevent European users from being locked into a single cloud provider and ensure healthy competition, not to force the use of companies to the detriment of efficiency."

However, the latest initiatives by big tech companies have been met with some skepticism. Von Thun of the Open Markets Institute calls them "sovereignty make-up" and warns Europeans not to consider them a substitute for the actions necessary to ensure true digital sovereignty.

Revcolevschi, CEO of OVHcloud, welcomes the initiatives, but says it's up to corporate decision-makers to "thoroughly analyze what's being offered to them," as data localization or encryption alone are not enough to provide true cloud computing sovereignty.

The debate about digital sovereignty goes far beyond cloud computing and affects all digital infrastructure and its use. Growing awareness has led to initiatives such as EuroStack , which aims to build a European technological infrastructure and urges policymakers not only to prioritize European companies in public procurement but also to create a fund to boost local technology. The initiative received explicit mention in the coalition agreement between Germany's two main parties.

However, investment is a key obstacle to achieving these goals , even if increased public procurement were to benefit European tech companies.

EuroStack maintains that an investment of €300 billion is needed over the next decade. Other estimates raise the sum to €5 trillion.

Even if the EU could pool public and private funding to boost its digital infrastructure, as officials and researchers have advocated, there is a risk that the process would take too long or not materialize at all.

The obvious example of this, cited so often that it has become a cliché, is the Franco-German initiative Gaia-X, a network of connected cloud providers that sought to challenge US cloud dominance in Europe.

For others, the debate needs to move away from infrastructure. "What we're missing is not chips or data centers," said Christian Klein, CEO of Germany's SAP, Europe's largest software group, in a recent call with journalists. "We're missing the people and talent who can apply AI in the context we need in Europe."

Economic growth

Boosting Europe's technological capabilities is also seen in Brussels as an opportunity to stem the bloc's economic slowdown.

Proton's Yen believes that key European sectors such as automotive, banking, e-commerce, and healthcare will be even more impacted by technology. For him, the price of the short-term transition away from US technology suppliers is not a cost, but rather "an investment in the future."

"If we don't have the engineers, the talent, and the know-how to build this kind of thing here, we're pretty much lost in the 21st century," he says. "We don't have a chance. Even without Trump, this is something that has to be done."

Still, these short-term costs remain tangible for many European companies, especially if local alternatives lack the scale or pricing options of their larger US counterparts.

Accusations of protectionism or anti-Americanism are sensitive for the EU, which has traditionally relied on open market values and remains dependent on US support in other areas.

European officials and diplomats emphasize that the bloc is willing to act more cautiously. But, as with the issue of defense spending, the situation is slowly changing. "Europe sometimes wakes up late, but when it does, things happen," says a senior EU official regarding the debate over technological sovereignty.

Revcolevschi agrees: "This is on our leaders' agenda," he says, adding that increased awareness among CEOs and top politicians is spreading to all levels of decision-making.

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