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) 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 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 Large Tech by actively fostering growth 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, during the last half 12 months 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 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 doubt that the post-Conflict worldwide order is in tatters and all bets are off on the subject of what the U.S. may do beneath President Donald Trump.
Key tech infrastructure that’s owned and operated by U.S. corporations doesn’t appear to be such a stable purchase, from a European perspective, if a presidential govt order could 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 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. Large 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 stated. “Europeans want sovereignty in essential 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. 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 precipitated 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 affords 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 essential digital infrastructure provision in areas like cloud computing will probably 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 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 might assist stoke demand and unlock funding by adopting public procurement necessities that might require at the very 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”).
“Trade will make investments if there are satisfactory demand prospects,” the letter writers say, occurring to counsel, “Prioritising areas the place Europe can already ship will probably 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 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 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 assets — seems 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 modify to homegrown suppliers — whether or not by vouchers or another assist 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 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 frequent 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’ means to compete in opposition to the likes of U.S. hyperscalers, similar 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 property, 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, similar 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 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 hire extraction.
“With non-European companies extracting worth and concentrating energy by 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 assist the event of harmonized necessities for public/personal cloud customers to decide to make use of “sovereign cloud providers” for storing their delicate information (similar 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.
In addition they need the bloc to evaluation 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 a enterprise outcomes lens — e.g. through the use of key efficiency indicators, essential success components and so on — to be able 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 (similar 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, similar to in direction of sustaining open supply infrastructure.
“The open supply group in Europe is big and extremely, extremely succesful,” she argues.
She additionally dismisses recommendations 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 all the things. Slightly 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 corporations are already capable of 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 larger autonomy in essential digital infrastructure.
Nonetheless, on funding Caffarra concedes that there are “different issues that should 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, similar 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 beneath von der Leyen’s presidency, the Euro Stack coalition is basically dismissing present efforts on this route as poorly directed and, in the end, wasted.
An excessive amount of funding is flowing in direction of academia and experimental R&D of their evaluation vs tangible industrial efforts — which, given the suitable assist to scale, might really obtain the purpose of strategic autonomy in digital infrastructure, is the suggestion. Therefore why the letter is pushing the EU exhausting to just accept an industry-led effort to show this tanker vs persevering with with top-down policymaking enterprise as traditional.
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 known as “AI factories“, as an AI ecosystem-building measure, is simply too reliant on tutorial consortia to ship something that’s commercially worthwhile.
The letter is rather less plain-speaking. Nevertheless it’s basically making the identical enchantment for the bloc’s lawmakers to get out of the best way on the subject of essential 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 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 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 apprehensive about retaliation from Large Tech since they’re additionally their prospects. (And it’s price noting that French AI large Mistral, which isn’t at the moment a signatory to the letter, not too long ago 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 another method).
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 just a few.
On startups Caffarra agrees that for some European entrepreneurs and their traders reaching an exit to U.S.-owned Large Tech is the endgame — which might create some stress on the subject of 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 have been open about their hopes to get “in mattress with Large Tech” — however we’ll spare their blushes.)
“That’s a method out,” she provides of this Large 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 venture round digital to face an opportunity.”
“Whereas protectionism is rising in varied locations — I believe Europe must assume totally different. By setting necessities similar 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 accredited 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 thought of pondering ‘Europe First’ has been taboo, regarded 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 because 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 choice to obtain expertise from the U.S. and China for brief time period value financial savings, relatively than making the strategic selection of investing in growing 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 state of affairs is so essential Europe wants to not degree the taking part in area 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 Large 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 12 months after the introduction of DMA, the place nothing has materially modified and the marketshare of Large Tech in Europe can be unchanged,” he tells TechCrunch. “Merely put, even when DMA can shave a degree off of American GDP by fines, it should do little to develop European GDP because it doesn’t basically create the demand vital 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 long run.”
“Successive generations of European entrepreneurs with the imaginative and prescient of what needs to be finished have come and gone and have been saying the identical factor for many years — maybe now’s the time to start out listening to them,” Yen provides.
Frank Karlitschek, CEO and founding father of German cloud providers participant Nextcloud — one other letter signatory — emails an extended listing 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’s displaying they haven’t any qualms utilizing govt energy, from tariffs to sanctions, to attain utterly unrelated objectives,” 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 searching for higher choices.”
Altering European procurement guidelines to, for instance, set a requirement that “essential infrastructure” should be 50-80% open supply in a 12 months or two wouldn’t value 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, relatively 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 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 not too long ago launched open cloud {industry} commonplace API specification SECA which permits to deploy and run workloads seamlessly throughout totally different cloud environments,” he notes. “This permits 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 ought to be inspired to pool assets 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 laws in opposition to Large Tech — “from privateness to antitrust guidelines” — suggesting sturdy motion on compliance might assist transfer the needle. “The Large 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.
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 implementing 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 exterior European management, warns Caffarra — and that requires a radical new survival technique, not a tweak of the dial.
