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 companies 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 options with the strongest business potential — from apps, platforms, and AI fashions to chips, computing, storage, and connectivity.
Firms 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 assist “sovereign digital infrastructure.”
The plan pushes for decreasing reliance on foreign-owned Massive Tech by actively fostering improvement of a so-called “Euro stack.” The European digital infrastructure pitch isn’t 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, 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 corporations together with Airbus, Ingredient, OVHCloud, Murena, Nextcloud, and Proton, to call just a few — 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 question that the post-Struggle worldwide order is in tatters and all bets are off with regards to what the U.S. may do underneath President Donald Trump.
Key tech infrastructure that’s owned and operated by U.S. corporations doesn’t seem like such a strong purchase, from a European perspective, if a presidential government order will 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, e-mail, or workplace software program. It could imply the entire 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 toward decreasing its dependency on U.S. Massive 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 vital infrastructures and people don’t solely include 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 prompted a lot hand-wringing in European capitals over what to do about slowing regional progress, 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 probably be full, Euro Stack backers recommend — explicitly predicting that: “Europe will lose out on digital innovation and productiveness progress with out sweeping and pressing change.”
“Our reliance on non-European applied sciences will change 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 may 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 return from native suppliers (aka a “Purchase European” mandate — favoring “European-led and assembled options”).
“Business will make investments if there are enough demand prospects,” the letter writers say, happening to recommend, “Prioritising areas the place Europe can already ship will probably be key to shifting sources quick to European suppliers, creating worth and market in a virtuous circle.”
“The goal 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 all the things 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 consumers, Caffarra says a Euro Stack plan may embody “inducements” to modify to homegrown suppliers — whether or not by way of vouchers or another assist mechanism. “Sure, they have to be sponsored, in some sense — however we’re not speaking about monumental, monumental 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” 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 goal is to dial up European suppliers’ potential 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 sources quick, supporting open supply options and interoperability (each technically and commercially), aggregating ‘better of breed’ present property, 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 deal with fundamental 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 received let in.
“When AWS and Microsoft particularly, and Google, received 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 companies extracting worth and concentrating energy by way of 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/non-public cloud customers to decide to make use of “sovereign cloud companies” for storing their delicate knowledge (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 knowledge.
Additionally they need the bloc to assessment its present EU Digital Decade technique — and, the place essential, 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 way of a enterprise outcomes lens — e.g. through the use of key efficiency indicators, vital success elements and so on — with the intention to make sure that EU funds go to companies 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 (akin to 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, akin to in direction of sustaining open supply infrastructure.
“The open supply neighborhood in Europe is big and extremely, extremely succesful,” she argues.
She additionally dismisses strategies that there could be eye-wateringly excessive prices for implementing Euro Stack general — 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 all the things. 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 aim of accelerating native capability by constructing demand for foundational applied sciences that European corporations are already in a position to present.
By locking in future demand, the Euro Stack pitch is that this can foster extra native tech {industry} progress and innovation — whereas serving to the bloc chart a course in direction of better autonomy in vital digital infrastructure.
Nonetheless, on funding Caffarra concedes that there are “different issues that have to be achieved” — 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 should always have that,” she provides, whereas nonetheless arguing that the sums concerned will be comparatively small, akin to by specializing in early stage startups (vs showering “helicopter cash” on established corporations).
Rethinking who leads
Whereas the EU has been speaking among the speak on digital sovereignty underneath von der Leyen’s presidency, the Euro Stack coalition is actually dismissing present efforts on this path as poorly directed and, finally, wasted.
An excessive amount of funding is flowing in direction of academia and experimental R&D of their evaluation vs tangible business efforts — which, given the correct assist to scale, may truly obtain the aim 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 normal.
Caffarra’s evaluation of the EU’s report on digital sovereignty is especially withering — she dubs its strategy “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. Nevertheless it’s basically making the identical attraction for the bloc’s lawmakers to get out of the way in which with regards to vital 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 type 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.
Business voices
A full listing 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 corporations to hitch as backers within the coming days (together with from Europe’s AI ecosystem), but in addition claims that some that wished to again the decision didn’t signal as they’re anxious about retaliation from Massive Tech since they’re additionally their clients. (And it’s value noting that French AI big Mistral, which isn’t presently a signatory to the letter, just lately made its personal plea for shrinking dependency on U.S. suppliers by shopping for European — whilst CEO and founder Arthur Mensch stated “pragmatism” is required as some digital infrastructure can’t be acquired some other method).
In addition to tech corporations, a variety 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 just a few.
On startups Caffarra agrees that for some European entrepreneurs and their traders attaining an exit to U.S.-owned Massive Tech is the endgame — which may create some pressure with regards to supporting a method that’s explicitly pulling within the different path. (She name-checked one startup affiliation that didn’t signal as she stated its members have been open about their hopes to get “in mattress with Massive Tech” — however we’ll spare their blushes.)
“That’s a technique out,” she provides of this Massive Tech exit playbook. “I’m not stopping that — I’m saying that there must be European 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 mission round digital to face an opportunity.”
“Whereas protectionism is rising in numerous locations — I feel Europe must assume completely different. By setting necessities akin to use of open supply or {that a} chat device or video convention system have to be interoperable with all others,” he goes on. “Or ensuring extensions in productiveness instruments adhere to requirements permitted by Europe — so Libre workplace at all times 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 pondering ‘Europe First’ has been taboo, regarded down on as being unseemly. And whereas the impulse to set a world instance and ‘play truthful’ is admirable, it’s naive and has left Europe at an obstacle,” he warns, including: “America and China have at all times been America First and China First, Europe must do the identical.
“European tech hasn’t fallen behind attributable to a scarcity of talent, expertise or creativity. It’s fallen behind due to a scarcity of demand. For 30 years, European governments and firms have made the shortsighted resolution to obtain know-how from the U.S. and China for brief time period value financial savings, reasonably than making the strategic alternative of investing in creating European capabilities.
“Fixing this demand downside is most simply achieved 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 enjoying area however actively tilt it in favor of homegrown tech. “That is most simply achieved by fixing the demand downside by requiring public procurement (and maybe even non-public procurement) to purchase European,” he suggests.
Requested concerning the affect of the Digital Markets Act (DMA) — the bloc’s flagship competitors reform that’s been up and working since March 2024. aiming to drive market contestability on Massive Tech dominance — Yen says he doesn’t assume the regulation is adequate 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 Massive Tech in Europe can also be unchanged,” he tells TechCrunch. “Merely put, even when DMA can shave some extent off of American GDP by way of fines, it’ll do little to develop European GDP because it doesn’t basically create the demand essential for GDP progress.”
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 direction of the Europe of the longer term.”
“Successive generations of European entrepreneurs with the imaginative and prescient of what needs to be achieved have come and gone and have been saying the identical factor for many years — maybe now’s the time to begin listening to them,” Yen provides.
Frank Karlitschek, CEO and founding father of German cloud companies participant Nextcloud — one other letter signatory — emails a protracted listing 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 information safety and privateness dangers, together with the looming menace of financial “blackmail” underneath the boot of an America First U.S. administration.
“The U.S. government proper now’s displaying they haven’t any qualms utilizing government energy, from tariffs to sanctions, to attain utterly unrelated targets,” he notes, including: “Greater than ever earlier than, U.S. cloud companies 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 value 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 direction of proprietary, reasonably than open supply).
“Extra authorities contracts should be awarded to European open supply corporations,” 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 permits the various European service suppliers to collectively type a community with better 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 when it comes to continuity.”
In additional remarks, Karlitschek requires the EU to correctly implement its present suite of digital rules in opposition to Massive Tech — “from privateness to antitrust guidelines” — suggesting sturdy motion on compliance may assist transfer the needle. “The Massive 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 targeted 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 under it — so compute, cloud, connectivity, chips. So the DMA isn’t 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.
