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) stated they need regional lawmakers to rethink present assist efforts in order that they’re centered on fostering uptake of homegrown alternate options with the strongest industrial 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 change its tech technique onto a quasi-war footing by committing to assist “sovereign digital infrastructure.”
The plan pushes for decreasing reliance on foreign-owned Huge Tech by actively fostering improvement of a so-called “Euro stack.” The European digital infrastructure pitch is just not popping out of skinny air — a Euro Stack paper written by, amongst others, the competitors economist Cristina Caffarra was revealed in January fleshing out the technique in some element.
There has additionally been, over the past 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, Component, 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 relation to what the U.S. would possibly do beneath 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 govt order could be issued forcing U.S. firms to switch 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 whole breakdown of our society. Sounds unrealistic? Properly, 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 at reducing its dependency on U.S. Big 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 stated. “Europeans want sovereignty in crucial infrastructures and people don’t solely encompass vitality and well being, however definitely additionally digital ones.”
Vance’s recent turn in Paris, on the AI Motion summit, additionally noticed the U.S. vp 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 brought on 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 just some weeks in the past — to “do something“.)
The coalition’s missive gives 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 crucial digital infrastructure provision in areas like cloud computing shall be full, Euro Stack backers recommend — 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 develop into 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 may require at the 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 satisfactory demand prospects,” the letter writers say, happening to recommend, “Prioritising areas the place Europe can already ship shall be key to shifting sources 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 principally European,” she tells TechCrunch. “What’s so dangerous about that? Individuals do purchase American, Chinese language purchase Chinese language — and we European say, ‘oh, purchase every thing 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 sources — seems to be like a idealistic relic of a gentler age.
Whereas the general public sector may very well be given ‘Purchase European’ mandates, for personal sector patrons, Caffarra says a Euro Stack plan might embrace “inducements” to change to homegrown suppliers — whether or not by vouchers or another assist mechanism. “Sure, they must be sponsored, in some sense — however we’re not speaking about huge, huge sums,” she suggests.
Pooling and federating
Different suggestions set out within the letter embrace the EU taking steps to allow “viable provide” by encouraging European technologists to undertake a “pooling and federating” strategy, 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’ capacity to compete towards the likes of U.S. hyperscalers, reminiscent of within the case of cloud computing.
“This implies once more working with {industry} to stock sources 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 obstacles — whereas assembly localization and safety imperatives,” the letter suggests — advocating for precedence be given to “tasks that tackle fundamental infrastructural wants, reminiscent of {hardware} autonomy and sovereign cloud and platforms.”
Whereas there have been previous makes an attempt on this route — notable, the Gaia-X effort launched again in 2020 which was geared 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 specifically, 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 hire extraction.
“With non-European companies extracting worth and concentrating energy by proprietary applied sciences, ‘openness’ (open science, requirements, knowledge) needs to be a pillar of Europe’s digital sovereign technique,” it contends.
Signatories are additionally pushing the EU to assist the event of harmonized necessities for public/personal cloud customers to choose to make use of “sovereign cloud providers” for storing their delicate knowledge (reminiscent of a certification scheme) — which can also be framed as a safety measure to protect towards non-EU extraterritorial legal guidelines that may pose a threat to European knowledge.
In addition they need the bloc to evaluation its present EU Digital Decade technique — and, the place crucial, repurpose present plans to make sure funding goes to “tangible, market related, result-oriented tasks”, as they put it.
Moreover, the letter requires the EU to evaluate tasks for potential funding by a enterprise outcomes lens — e.g. by utilizing key efficiency indicators, crucial success components and so forth — in an effort to be sure that EU funds go to providers with “sturdy adoption prospects.”
Redirecting and concentrating EU assist 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 assist public investments in European digital infrastructure — particularly in capital intensive areas of the tech worth chain (reminiscent of chips and quantum computing).
Caffarra argues that such a fund wouldn’t require big quantities of cash — smaller quantities may very well be strategically focused, she suggests, reminiscent of in the direction of sustaining open supply infrastructure.
“The open supply neighborhood in Europe is gigantic and extremely, extremely succesful,” she argues.
She additionally dismisses ideas that there can 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 exchange every thing. Somewhat 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 may foster extra native tech {industry} development and innovation — whereas serving to the bloc chart a course in the direction of larger autonomy in crucial digital infrastructure.
Nonetheless, on funding Caffarra concedes that there are “different issues that must be finished” — 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 could be comparatively small, reminiscent of 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 beneath von der Leyen’s presidency, the Euro Stack coalition is actually dismissing present efforts on this route as poorly directed and, in the end, wasted.
An excessive amount of funding is flowing in the direction of academia and experimental R&D of their evaluation vs tangible industrial efforts — which, given the best assist 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 ordinary.
Caffarra’s evaluation of the EU’s file on digital sovereignty is especially withering — she dubs its strategy “ineffective” and argues that, for instance, the EU’s current push to arrange so known as “AI factories“, as an AI ecosystem-building measure, is just too reliant on educational consortia to ship something that’s commercially priceless.
The letter is rather less plain-speaking. Nevertheless it’s primarily making the identical enchantment for the bloc’s lawmakers to get out of the way in which in relation to crucial decision-making in relation to Europe’s dwindling digital infrastructure prospects — and as a substitute 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 assist 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 remodel 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 forth, plus industrial giants like Airbus and defence like Dassault Systemes.”
She expects extra firms to affix 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 apprehensive about retaliation from Huge Tech since they’re additionally their clients. (And it’s price noting that French AI large Mistral, which isn’t presently a signatory to the letter, recently made its own plea for shrinking dependency on U.S. suppliers by buying European — whilst CEO and founder Arthur Mensch stated “pragmatism” is required as some digital infrastructure can’t be acquired another approach).
In addition to tech firms, a spread of regional enterprise associations have put their identify 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 buyers reaching an exit to U.S.-owned Huge Tech is the endgame — which might create some pressure in relation to supporting a method that’s explicitly pulling within the different route. (She name-checked one startup affiliation that didn’t signal as she stated its members had been open about their hopes to get “in mattress with Huge Tech” — however we’ll spare their blushes.)
“That’s a technique 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 know-how on the Swedish cloud supplier Iver (one other signatory), which acquired Metropolis Community in 2020 — tells TechCrunch: “The modifications wanted are so foundational I feel Europe wants a brand new Airbus-like undertaking round digital to face an opportunity.”
“Whereas protectionism is rising in numerous locations — I feel Europe must assume totally different. By setting necessities reminiscent of use of open supply or {that a} chat device or video convention system must be interoperable with all others,” he goes on. “Or ensuring extensions in productiveness instruments adhere to requirements permitted by Europe — so Libre workplace all the time will work nice with Phrase or Energy Level for example.
“There must be some component of public procurement requirement as properly.”
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 pondering ‘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 resulting from a scarcity of ability, expertise or creativity. It’s fallen behind due to a scarcity of demand. For 30 years, European governments and firms have made the shortsighted determination to acquire know-how from the U.S. and China for brief time period price financial savings, moderately than making the strategic alternative of investing in creating European capabilities.
“Fixing this demand drawback is most simply finished by requiring that European public sector purchase European, creating the impetus for the event of Europe’s tech sector.”
Yen says the demand scenario is so crucial Europe wants to not stage the taking part in subject however actively tilt it in favor of homegrown tech. “That is most simply finished by fixing the demand drawback by requiring public procurement (and maybe even personal procurement) to purchase European,” he suggests.
Requested in regards to the affect 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 fines, it should do little to develop European GDP because it doesn’t basically create the demand crucial 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 a substitute of wanting in the direction of the Europe of the long run.”
“Successive generations of European entrepreneurs with the imaginative and prescient of what must be finished 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 strategy and what are the dangers of simply doing extra of the identical, flagging a raft of knowledge safety and privateness dangers, together with the looming menace of financial “blackmail” beneath the boot of an America First U.S. administration.
“The U.S. govt proper now could be exhibiting they don’t have any qualms utilizing govt energy, from tariffs to sanctions, to attain fully unrelated targets,” he notes, including: “Greater than ever earlier than, U.S. cloud providers is usually a chokehold for political, financial or different causes. And organizations are on the lookout for higher choices.”
Altering European procurement guidelines to, for instance, set a requirement that “crucial infrastructure” have to 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 corporations are higher positioned to capitalize vs U.S. counterparts (which skew in the direction of proprietary, moderately than open supply).
“Extra authorities contracts have to be awarded to European open supply firms,” he additionally suggests, noting current strikes by the German authorities on this route, 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 hundreds from one cloud supplier to a different.
“One instance is the lately launched open cloud {industry} commonplace API specification SECA which permits to deploy and run workloads seamlessly throughout totally different cloud environments,” he notes. “This allows the various European service suppliers to collectively kind a community with larger scalability and continuity than every can present individually.
“Equally, smaller distributors can and needs to be inspired to pool sources collectively into joint choices, giving the general public sector and huge companies extra certainty by way of continuity.”
In additional remarks, Karlitschek requires the EU to correctly implement its present suite of digital rules towards Huge Tech — “from privateness to antitrust guidelines” — suggesting sturdy motion on compliance might assist transfer the needle. “The Huge Tech corporations are usually not dealing with many penalties for his or her gatekeeping and a few basic points round privateness are usually not addressed,” he factors out.
Nevertheless Caffarra has no truck with such fiddling sideshows. She’s satisfied {that a} far greater 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 targeted on. These are the merchandise,” she emphasizes, when requested why the EU robustly implementing 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 is just not bothered with that.”
The important thing level that the areas’ lawmakers should grok and quick is that the majority tech infrastructure is now exterior European management, warns Caffarra — and that requires a radical new survival technique, not a tweak of the dial.