A broad coalition drawn from throughout the ranks of Europe’s tech {industry} is asking 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 occasions.
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 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 help “sovereign digital infrastructure.”
The plan pushes for lowering 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 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 corporations together with Airbus, Aspect, 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 question that the post-Warfare worldwide order is in tatters and all bets are off in the case of what the U.S. would possibly do beneath President Donald Trump.
Key tech infrastructure that’s owned and operated by U.S. corporations doesn’t appear to be such a strong purchase, from a European perspective, if a presidential govt order might be issued forcing U.S. corporations 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 might imply the entire breakdown of our society. Sounds unrealistic? Properly, one thing comparable 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. Massive Tech suppliers — tells TechCrunch.
“Trump switched off entry to 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 important 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 triggered a lot hand-wringing in European capitals over what to do about slowing regional progress, however much less clearly tangible motion. (Therefore its writer’s exasperated cry to lawmakers within the European Parliament only a few weeks in the past — to “do one thing“.)
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 important digital infrastructure provision in areas like cloud computing might be full, Euro Stack backers counsel — 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 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 may assist stoke demand and unlock funding by adopting public procurement necessities that may require a minimum of 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 counsel, “Prioritising areas the place Europe can already ship might 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 area 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 instructed to purchase European, or principally 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 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 might be given ‘Purchase European’ mandates, for personal sector patrons, Caffarra says a Euro Stack plan may embrace “inducements” to modify to homegrown suppliers — whether or not by means of vouchers or another help mechanism. “Sure, they have to 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 embrace 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 technique to speed up scaling of homegrown digital infrastructure.
By working collectively on aligned approaches, the intention is to dial up European suppliers’ skill to compete in opposition to the likes of U.S. hyperscalers, comparable 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 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 tackle fundamental infrastructural wants, comparable to {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 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 specifically, 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 international hyperscalers whose expansionist, proprietary playbook is all about maximizing buyer lock-in and hire extraction.
“With non-European firms extracting worth and concentrating energy by means of proprietary applied sciences, ‘openness’ (open science, requirements, information) must 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 (comparable to a certification scheme) — which can be framed as a safety measure to protect in opposition to non-EU extraterritorial legal guidelines which may pose a threat to European information.
Additionally they need the bloc to overview its present EU Digital Decade technique — and, the place obligatory, 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. through the use of key efficiency indicators, important success components and many others — with a purpose to be certain that EU funds go to providers with “robust 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 (comparable to chips and quantum computing).
Caffarra argues that such a fund wouldn’t require big quantities of cash — smaller quantities might be strategically focused, she suggests, comparable 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 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 substitute every thing. Reasonably 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 objective of accelerating native capability by constructing demand for foundational applied sciences that European corporations are already capable of present.
By locking in future demand, the Euro Stack pitch is that it will foster extra native tech {industry} progress and innovation — whereas serving to the bloc chart a course in direction of larger autonomy in important digital infrastructure.
Nonetheless, on funding Caffarra concedes that there are “different issues that have to be accomplished” — 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 might be comparatively small, comparable to by specializing in early stage startups (vs showering “helicopter cash” on established corporations).
Rethinking who leads
Whereas the EU has been speaking a few of the discuss 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, 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 help to scale, may truly obtain the objective of strategic autonomy in digital infrastructure, is the suggestion. Therefore why the letter is pushing the EU laborious to simply accept an industry-led effort to show this tanker vs persevering with with top-down policymaking enterprise as common.
Caffarra’s evaluation of the EU’s document 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 tutorial consortia to ship something that’s commercially beneficial.
The letter is rather less plain-speaking. Nevertheless it’s primarily making the identical attraction for the bloc’s lawmakers to get out of the best way in the case of important 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 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.
Business voices
A full record 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 many others, plus industrial giants like Airbus and defence like Dassault Systemes.”
She expects extra corporations to affix as backers within the coming days (together with from Europe’s AI ecosystem), but additionally claims that some that wished to again the decision didn’t signal as they’re frightened about retaliation from Massive Tech since they’re additionally their clients. (And it’s value noting that French AI large Mistral, which isn’t at the moment 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 mentioned “pragmatism” is required as some digital infrastructure can’t be acquired another manner).
In addition to tech corporations, 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 Massive Tech is the endgame — which may create some rigidity in the case of supporting a technique that’s explicitly pulling within the different route. (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 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 expertise 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 venture round digital to face an opportunity.”
“Whereas protectionism is rising in numerous locations — I feel Europe must suppose completely different. By setting necessities comparable to use of open supply or {that a} chat software 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 all the time will work nice with Phrase or Energy Level for example.
“There must be some ingredient 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 a giant shift of mindset is required.
“Traditionally the concept of pondering ‘Europe First’ has been taboo, appeared 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 a drawback,” 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 an absence of talent, expertise or creativity. It’s fallen behind due to an absence of demand. For 30 years, European governments and corporations have made the shortsighted resolution to acquire expertise from the U.S. and China for brief time period price financial savings, reasonably than making the strategic alternative of investing in creating European capabilities.
“Fixing this demand downside is most simply accomplished 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 important Europe wants to not degree the taking part in discipline however actively tilt it in favor of homegrown tech. “That is most simply accomplished 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 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 suppose 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 Massive Tech in Europe can be unchanged,” he tells TechCrunch. “Merely put, even when DMA can shave a degree off of American GDP by means of fines, it would do little to develop European GDP because it doesn’t basically create the demand obligatory 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 an alternative of wanting in direction of the Europe of the long run.”
“Successive generations of European entrepreneurs with the imaginative and prescient of what needs to be accomplished 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 a protracted record 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” beneath the boot of an America First U.S. administration.
“The U.S. govt proper now could be exhibiting they haven’t any qualms utilizing govt energy, from tariffs to sanctions, to realize fully unrelated targets,” he notes, including: “Greater than ever earlier than, U.S. cloud providers generally is 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 “important 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 direction of proprietary, reasonably than open supply).
“Extra authorities contracts have to be awarded to European open supply corporations,” 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 masses from one cloud supplier to a different.
“One instance is the just lately launched open cloud {industry} customary API specification SECA which permits to deploy and run workloads seamlessly throughout completely different cloud environments,” he notes. “This allows the numerous European service suppliers to collectively kind a community with larger scalability and continuity than every can present individually.
“Equally, smaller distributors can and must be inspired to pool sources 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 rules in opposition to Massive Tech — “from privateness to antitrust guidelines” — suggesting strong motion on compliance may assist transfer the needle. “The Massive Tech corporations aren’t going through many penalties for his or her gatekeeping and a few elementary points round privateness aren’t 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 concentrated 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 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.
