A broad coalition drawn from throughout the ranks of Europe’s tech {industry} is looking for “radical motion” from European Union lawmakers to shrink reliance on foreign-owned digital infrastructure and providers to bolster the bloc’s financial prospects, resilience, and safety in more and more fraught geopolitical instances.
In an open letter to European Fee president, Ursula von der Leyen, and the EU’s digital chief, Henna Virkkunen, which TechCrunch reviewed forward of publication, greater than 80 signatories (representing round 100 organizations) mentioned they need regional lawmakers to rethink present help efforts in order that they’re centered on fostering uptake of homegrown alternate options with the strongest business potential — from apps, platforms, and AI fashions to chips, computing, storage, and connectivity.
Corporations spanning areas together with cloud, telecoms, defence, together with a number of regional enterprise and startup associations, have put their names to the letter — which was despatched to the Fee on Sunday — urging the bloc to modify its tech technique onto a quasi-war footing by committing to help “sovereign digital infrastructure.”
The plan pushes for lowering reliance on foreign-owned Huge Tech by actively fostering growth of a so-called “Euro stack.” The European digital infrastructure pitch shouldn’t be popping out of skinny air — a Euro Stack paper written by, amongst others, the competitors economist Cristina Caffarra was printed in January fleshing out the technique in some element.
There has additionally been, during the last half yr or so, a smattering of convention chatter turning over the potential for enterprising Europeans to grab a geopolitically fraught second to press the case for the EU to undertake a digital industrial technique that’s squarely centered on favoring native innovation.
The rallying name to place European tech first — backed by firms together with Airbus, Factor, OVHCloud, Murena, Nextcloud, and Proton, to call a couple of — follows the shock of the Munich safety convention, the place U.S. Vice President JD Vance tore into Europe like an assault canine, leaving delegates in little doubt that the post-Battle worldwide order is in tatters and all bets are off in terms of what the U.S. may do below President Donald Trump.
Key tech infrastructure that’s owned and operated by U.S. firms doesn’t appear like such a strong purchase, from a European perspective, if a presidential government order may be issued forcing U.S. companies to modify off service provision or terminate a provide chain at a pen stroke.
“Think about Europe with out web search, electronic mail, or workplace software program. It will imply the entire breakdown of our society. Sounds unrealistic? Nicely, one thing related simply occurred to Ukraine,” Wolfgang Oels, COO of the Berlin-based, tree-planting search engine Ecosia — one signatory to the letter that was already taking steps aimed toward lowering its dependency on U.S. Huge Tech suppliers — tells TechCrunch.
“Trump switched off entry to very important infrastructures as a result of Ukraine was not able to cede its land and hand over its minerals,” Oels mentioned. “Europeans want sovereignty in vital infrastructures and people don’t solely encompass vitality and well being, however actually additionally digital ones.”
Vance’s current flip in Paris, on the AI Motion summit, additionally noticed the U.S. vice chairman lay into European lawmaking as a barrier to innovation, and a barrier to U.S. tech supremacy. His message boiled right down to “do what we are saying or else” — because the Trump administration made it loud and clear it’s hell bent on retaining digital dominance because the world strikes into an AI-accelerated period.
The {industry} letter isn’t solely responding to exterior threats, although. It follows (and references) the 2024 Draghi report on EU competitiveness — which has precipitated a lot hand-wringing in European capitals over what to do about slowing regional development, however much less clearly tangible motion. (Therefore its creator’s exasperated cry to lawmakers within the European Parliament only a few weeks in the past — to “do one thing“.)
The coalition’s missive provides a European tech {industry} first stab prescription for motion, mixed with a stark warning of the perils of the bloc persevering with as is.
With out pressing motion to foster demand for European-made applied sciences ,there’s a threat that U.S. hyperscalers’ takeover of vital digital infrastructure provision in areas like cloud computing will likely be full, Euro Stack backers counsel — explicitly predicting that: “Europe will lose out on digital innovation and productiveness development with out sweeping and pressing change.”
“Our reliance on non-European applied sciences will turn out to be nearly full in lower than three years at present charges,” they go on to warn.
So what’s the particular one thing that this tech {industry} coalition is advocating for the EU to do?
Purchase European
The letter suggests the bloc might assist stoke demand and unlock funding by adopting public procurement necessities that will require at the very least a portion of public our bodies’ digital necessities to come back from native suppliers (aka a “Purchase European” mandate — favoring “European-led and assembled options”).
“Trade will make investments if there are ample demand prospects,” the letter writers say, occurring to counsel, “Prioritising areas the place Europe can already ship will likely be key to shifting assets quick to European suppliers, creating worth and market in a virtuous circle.”
“The intention is to not exclude non-European gamers, however to create house the place European suppliers can legitimately compete (and justify funding),” they add.
Caffarra dubs procurement necessities a “no brainer.”
“We’d like the general public sector to be informed to purchase European, or largely European,” she tells TechCrunch. “What’s so unhealthy about that? Individuals do purchase American, Chinese language purchase Chinese language — and we European say, ‘oh, purchase the whole lot by all means’.”
The argument is that in an “America First” world, the place the world’s strongest nation can’t be counted upon to have Europe’s again anymore, the EU’s studious neutrality — vis-a-vis the place it invests its assets — seems to be like a idealistic relic of a gentler age.
Whereas the general public sector might be given ‘Purchase European’ mandates, for personal sector patrons, Caffarra says a Euro Stack plan might embody “inducements” to modify to homegrown suppliers — whether or not by means of vouchers or another help mechanism. “Sure, they should be backed, in some sense — however we’re not speaking about huge, huge sums,” she suggests.
Pooling and federating
Different suggestions set out within the letter embody the EU taking steps to allow “viable provide” by encouraging European technologists to undertake a “pooling and federating” method, together with the event of widespread requirements — as a method to speed up scaling of homegrown digital infrastructure.
By working collectively on aligned approaches, the intention is to dial up European suppliers’ capability to compete in opposition to the likes of U.S. hyperscalers, akin to within the case of cloud computing.
“This implies once more working with {industry} to stock assets quick, supporting open supply options and interoperability (each technically and commercially), aggregating ‘better of breed’ present belongings, supporting onboarding with integration platforms and low compliance limitations — whereas assembly localization and safety imperatives,” the letter suggests — advocating for precedence be given to “initiatives that handle primary infrastructural wants, akin to {hardware} autonomy and sovereign cloud and platforms.”
Whereas there have been previous makes an attempt on this path — notable, the Gaia-X effort launched again in 2020 which was aimed toward powering up a European cloud to rival U.S. and Chinese language suppliers — that digital sovereignty push was successfully defanged as soon as U.S. hyperscalers acquired let in.
“When AWS and Microsoft particularly, and Google, acquired into Gaia-X, they blew it up from inside,” notes Caffarra.
The letter additionally takes a stab at articulating why it’s so self-defeating for Europe to roll out the welcome mat to overseas hyperscalers whose expansionist, proprietary playbook is all about maximizing buyer lock-in and lease extraction.
“With non-European firms extracting worth and concentrating energy by means of proprietary applied sciences, ‘openness’ (open science, requirements, information) ought to be a pillar of Europe’s digital sovereign technique,” it contends.
Signatories are additionally pushing the EU to help the event of harmonized necessities for public/non-public cloud customers to decide to make use of “sovereign cloud providers” for storing their delicate information (akin to a certification scheme) — which can also be framed as a safety measure to protect in opposition to non-EU extraterritorial legal guidelines that may pose a threat to European information.
Additionally they need the bloc to assessment its present EU Digital Decade technique — and, the place vital, repurpose present plans to make sure funding goes to “tangible, market related, result-oriented initiatives”, as they put it.
Moreover, the letter requires the EU to evaluate initiatives for potential funding by means of a enterprise outcomes lens — e.g. by utilizing key efficiency indicators, vital success elements and so on — so as to be certain that EU funds go to providers with “sturdy adoption prospects.”
Redirecting and concentrating EU help on homegrown tech infrastructure that has the strongest potential to scale is core to the plan.
Sovereign infrastructure fund
On funding, the letter makes a name for the EU to arrange a “Sovereign Infrastructure Fund” to help public investments in European digital infrastructure — particularly in capital intensive areas of the tech worth chain (akin to chips and quantum computing).
Caffarra argues that such a fund wouldn’t require large quantities of cash — smaller quantities might be strategically focused, she suggests, akin to in the direction of sustaining open supply infrastructure.
“The open supply neighborhood in Europe is big and extremely, extremely succesful,” she argues.
She additionally dismisses ideas that there could be eye-wateringly excessive prices for implementing Euro Stack total — such because the €5 trillion+ price-tag that’s been floated by U.S. commerce group, Chamber of Progress, which counts a number of U.S. tech giants as members — emphasizing that this isn’t a name to tear out and change the whole lot. Fairly it’s a plea to Europe to get on the identical web page and work collectively on a joined-up digital industrial technique with the purpose of accelerating native capability by constructing demand for foundational applied sciences that European firms are already capable of present.
By locking in future demand, the Euro Stack pitch is that this can foster extra native tech {industry} development and innovation — whereas serving to the bloc chart a course in the direction of better autonomy in vital digital infrastructure.
Nonetheless, on funding Caffarra concedes that there are “different issues that should be executed” — pointing to what number of European entrepreneurs find yourself crossing the pond to search for VC funding, for instance.
“A sovereign fund that invests in European startups? Heck yeah, we must always have that,” she provides, whereas nonetheless arguing that the sums concerned may be comparatively small, akin to by specializing in early stage startups (vs showering “helicopter cash” on established firms).
Rethinking who leads
Whereas the EU has been speaking a number of the speak on digital sovereignty below von der Leyen’s presidency, the Euro Stack coalition is basically dismissing present efforts on this path as poorly directed and, finally, wasted.
An excessive amount of funding is flowing in the direction of academia and experimental R&D of their evaluation vs tangible business efforts — which, given the appropriate help to scale, might truly obtain the purpose of strategic autonomy in digital infrastructure, is the suggestion. Therefore why the letter is pushing the EU arduous to just accept an industry-led effort to show this tanker vs persevering with with top-down policymaking enterprise as standard.
Caffarra’s evaluation of the EU’s report on digital sovereignty is especially withering — she dubs its method “ineffective” and argues that, for instance, the EU’s current push to arrange so referred to as “AI factories“, as an AI ecosystem-building measure, is simply too reliant on educational consortia to ship something that’s commercially invaluable.
The letter is rather less plain-speaking. But it surely’s primarily making the identical enchantment for the bloc’s lawmakers to get out of the best way in terms of vital decision-making in relation to Europe’s dwindling digital infrastructure prospects — and as an alternative lean into their “convening powers to mobilise {industry} to actively assist coordinate and validate a continent-wide technique to energy a European digital sovereign effort,” because it places it.
“To help Europe on this acute second of disaster for our safety and strategic autonomy, the Fee should urgently kind and convene working teams with {industry} to rework its tech sovereignty ambition into concrete actions,” the {industry} coalition suggests.
TechCrunch reached out to the European Fee for a response to the Euro Stack pitch paper however on the time of writing it had not responded.
Trade voices
A full checklist of signatories is included on the backside of the letter — however Caffarra sums up the collective ink as “virtually all of Europe’s cloud, telcos, software program, open supply and so on, plus industrial giants like Airbus and defence like Dassault Systemes.”
She expects extra firms to hitch as backers within the coming days (together with from Europe’s AI ecosystem), but in addition claims that some that needed to again the decision didn’t signal as they’re anxious about retaliation from Huge Tech since they’re additionally their prospects. (And it’s value noting that French AI large Mistral, which isn’t at present a signatory to the letter, just lately made its personal plea for shrinking dependency on U.S. suppliers by shopping for European — at the same time as CEO and founder Arthur Mensch mentioned “pragmatism” is required as some digital infrastructure can’t be acquired some other manner).
In addition to tech firms, a variety of regional enterprise associations have put their title to the letter — together with the likes of Join Europe (representing telcos), the OSBA (Open Supply Enterprise Alliance), European Digital SME Alliance, European Startup Community, and France Digitale to call a couple of.
On startups Caffarra agrees that for some European entrepreneurs and their traders reaching an exit to U.S.-owned Huge Tech is the endgame — which might create some pressure in terms of supporting a method that’s explicitly pulling within the different path. (She name-checked one startup affiliation that didn’t signal as she mentioned its members had been open about their hopes to get “in mattress with Huge Tech” — however we’ll spare their blushes.)
“That’s a method out,” she provides of this Huge Tech exit playbook. “I’m not stopping that — I’m saying that there must be European alternate options to it.”
Europe first?
Discussing why he’s backing the Euro Stack proposal, Johan Christenson, founding father of European cloud supplier Cleura (previously Metropolis Community) — and now head of expertise on the Swedish cloud supplier Iver (one other signatory), which acquired Metropolis Community in 2020 — tells TechCrunch: “The adjustments wanted are so foundational I believe Europe wants a brand new Airbus-like undertaking round digital to face an opportunity.”
“Whereas protectionism is rising in varied locations — I believe Europe must assume completely different. By setting necessities akin to use of open supply or {that a} chat instrument or video convention system should be interoperable with all others,” he goes on. “Or ensuring extensions in productiveness instruments adhere to requirements accepted by Europe — so Libre workplace all the time will work nice with Phrase or Energy Level as an example.
“There must be some aspect of public procurement requirement as nicely.”
Any Yen, founding father of Switzerland-based privateness instruments maker Proton — one other signatory to the letter — additionally says an enormous shift of mindset is required.
“Traditionally the concept of considering ‘Europe First’ has been taboo, seemed down on as being unseemly. And whereas the impulse to set a worldwide instance and ‘play truthful’ is admirable, it’s naive and has left Europe at an obstacle,” he warns, including: “America and China have all the time been America First and China First, Europe must do the identical.
“European tech hasn’t fallen behind on account of a scarcity of ability, expertise or creativity. It’s fallen behind due to a scarcity of demand. For 30 years, European governments and corporations have made the shortsighted determination to acquire expertise from the U.S. and China for brief time period price financial savings, reasonably than making the strategic selection of investing in growing European capabilities.
“Fixing this demand downside is most simply executed by requiring that European public sector purchase European, creating the impetus for the event of Europe’s tech sector.”
Yen says the demand state of affairs is so vital Europe wants to not degree the taking part in discipline however actively tilt it in favor of homegrown tech. “That is most simply executed by fixing the demand downside by requiring public procurement (and maybe even non-public procurement) to purchase European,” he suggests.
Requested in regards to the impression of the Digital Markets Act (DMA) — the bloc’s flagship competitors reform that’s been up and operating since March 2024. aiming to drive market contestability on Huge Tech dominance — Yen says he doesn’t assume the regulation is enough by itself. Therefore Proton backing the Euro Stack name for extra radical motion.
“We see that now one yr after the introduction of DMA, the place nothing has materially modified and the marketshare of Huge Tech in Europe can also be unchanged,” he tells TechCrunch. “Merely put, even when DMA can shave some extent off of American GDP by means of fines, it’ll do little to develop European GDP because it doesn’t basically create the demand vital for GDP development.”
He additionally doesn’t mince his phrases in evaluation the efficiency of the Fee — arguing it’s “prioritizing the Europe of the previous as an alternative of wanting in the direction of the Europe of the longer term.”
“Successive generations of European entrepreneurs with the imaginative and prescient of what needs to be executed have come and gone and have been saying the identical factor for many years — maybe now could be the time to begin listening to them,” Yen provides.
Frank Karlitschek, CEO and founding father of German cloud providers participant Nextcloud — one other letter signatory — emails an extended checklist of solutions when requested why he believes Europe wants a brand new method and what are the dangers of simply doing extra of the identical, flagging a raft of information safety and privateness dangers, together with the looming risk of financial “blackmail” below the boot of an America First U.S. administration.
“The U.S. government proper now could be exhibiting they don’t have any qualms utilizing government energy, from tariffs to sanctions, to realize fully unrelated objectives,” he notes, including: “Greater than ever earlier than, U.S. cloud providers could be a chokehold for political, financial or different causes. And organizations are searching for higher choices.”
Altering European procurement guidelines to, for instance, set a requirement that “vital infrastructure” should be 50-80% open supply in a yr or two wouldn’t price the tax payer something, Karlitschek suggests, however “would create an explosion of latest startups and innovation” since European tech companies are higher positioned to capitalize vs U.S. counterparts (which skew in the direction of proprietary, reasonably than open supply).
“Extra authorities contracts should be awarded to European open supply firms,” he additionally suggests, noting current strikes by the German authorities on this path, and arguing: “Digital sovereignty can solely be achieved with open supply software program.”
Karlitschek additionally lauds efforts to agree requirements that make it simpler to maneuver work masses from one cloud supplier to a different.
“One instance is the just lately launched open cloud {industry} normal API specification SECA which permits to deploy and run workloads seamlessly throughout completely different cloud environments,” he notes. “This allows the various European service suppliers to collectively kind a community with better scalability and continuity than every can present individually.
“Equally, smaller distributors can and ought to be inspired to pool assets collectively into joint choices, giving the general public sector and enormous companies extra certainty when it comes to continuity.”
In additional remarks, Karlitschek requires the EU to correctly implement its present suite of digital laws in opposition to Huge Tech — “from privateness to antitrust guidelines” — suggesting sturdy motion on compliance might assist transfer the needle. “The Huge Tech companies should not going through many penalties for his or her gatekeeping and a few basic points round privateness should not addressed,” he factors out.
Nonetheless Caffarra has no truck with such fiddling sideshows. She’s satisfied {that a} far larger shift of mindset is required; one which calls for the EU get the heck out of its regulatory consolation zone.
“They’re regulating the highest [of the stack] — search, social networks, e-commerce and app shops; these are the issues that the DMA is concentrated on. These are the merchandise,” she emphasizes, when requested why the EU robustly imposing its present guidelines isn’t the reply to digital autonomy. “We’re speaking about infrastructure that lies beneath it — so compute, cloud, connectivity, chips. So the DMA shouldn’t be bothered with that.”
The important thing level that the areas’ lawmakers should grok and quick is that the majority tech infrastructure is now outdoors European management, warns Caffarra — and that requires a radical new survival technique, not a tweak of the dial.
