Report from the Financial Times
In Brief – Influential European businesses are warning that an overzealous push for “tech sovereignty” by European policymakers trying to reduce dependence on major US tech companies could harm the profitability and competitiveness of major corporations based on the continent. Leading firms across industries from banking to manufacturing say that their corporate digital infrastructure is deeply tied to American software, cloud computing and AI services, and that any requirement to rapidly shift away of those systems would be costly, disruptive, and harmful to their own global competitiveness and that of the overall European market. The business concerns come as the European Commission is preparing to present a “tech sovereignty package” aimed at strengthening European control over cloud and software services, driven by concerns over the level of concentration in key digital infrastructure provided by the largest US tech and AI companies, and fears that US foreign policy under Donald Trump could force a technological decoupling.
Context – The huge disruptions in US-EU relations that marked the entire first year of the second Trump presidency boosted European “digital sovereignty” efforts that are strongly supported by small EU-based tech companies challenging the US giants. The rapid escalation of January’s Greenland crisis put an exclamation point on those concerns. Last March, nearly 100 European companies and trade groups signed a letter calling on the EU Commission to take “radical action” for Europe to become more technologically independent and 2025 closed with France and Germany co-hosting a Summit on European Digital Sovereignty where French President Emmanuel Macron said that Europe must not be a “client” of outside tech providers or a “vassal” to the US or China. The Eurostack Initiative calls for promoting European offerings across the entire digital ecosystem, including chips, computing, applications, and AI. US tech companies certainly don’t want bilateral foreign policy disagreements undermining key markets.