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 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 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 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, 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 number 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-Warfare 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. firms doesn’t seem like such a stable purchase, from a European perspective, if a presidential government order might 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 whole 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 decreasing 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 stated. “Europeans want sovereignty in essential infrastructures and people don’t solely encompass vitality and well being, however actually additionally digital ones.”
Vance’s latest 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 all the way 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 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 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 danger that U.S. hyperscalers’ takeover of essential digital infrastructure provision in areas like cloud computing will likely 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 turn 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 might 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”).
“Business will make investments if there are enough demand prospects,” the letter writers say, occurring to recommend, “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 purpose 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 largely 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 assets — appears 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 embody “inducements” to modify to homegrown suppliers — whether or not by way of vouchers or another help mechanism. “Sure, they must 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 frequent requirements — as a method to speed up scaling of homegrown digital infrastructure.
By working collectively on aligned approaches, the purpose is to dial up European suppliers’ capacity 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 obstacles — whereas assembly localization and safety imperatives,” the letter suggests — advocating for precedence be given to “initiatives that tackle 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 bought let in.
“When AWS and Microsoft particularly, and Google, bought 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 way 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 (similar 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 danger to European information.
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 initiatives”, as they put it.
Moreover, the letter requires the EU to evaluate initiatives for potential funding by way of a enterprise outcomes lens — e.g. by utilizing key efficiency indicators, essential success components and many others — with a purpose to be sure 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 (similar to chips and quantum computing).
Caffarra argues that such a fund wouldn’t require enormous quantities of cash — smaller quantities might 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 options 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 change every thing. Quite 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 in a position to present.
By locking in future demand, the Euro Stack pitch is that it will foster extra native tech {industry} development and innovation — whereas serving to the bloc chart a course in direction of better autonomy in essential digital infrastructure.
Nonetheless, on funding Caffarra concedes that there are “different issues that must 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 might be comparatively small, similar to by specializing in early stage startups (vs showering “helicopter cash” on established firms).
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 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 proper help to scale, may really obtain the purpose of strategic autonomy in digital infrastructure, is the suggestion. Therefore why the letter is pushing the EU arduous to simply 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 document on digital sovereignty is especially withering — she dubs its method “ineffective” and argues that, for instance, the EU’s latest 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 worthwhile.
The letter is rather less plain-speaking. But it surely’s primarily making the identical attraction for the bloc’s lawmakers to get out of the way in which with regards to essential 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.
Business 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 many others, 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 wished to again the decision didn’t signal as they’re frightened about retaliation from Huge Tech since they’re additionally their clients. (And it’s price noting that French AI big Mistral, which isn’t at the moment a signatory to the letter, 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 approach).
In addition to tech firms, a spread 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 number of.
On startups Caffarra agrees that for some European entrepreneurs and their traders attaining an exit to U.S.-owned Huge Tech is the endgame — which may create some pressure with regards 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 have 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 know-how on the Swedish cloud supplier Iver (one other signatory), which acquired Metropolis Community in 2020 — tells TechCrunch: “The adjustments 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 varied locations — I feel Europe must assume completely different. By setting necessities similar to use of open supply or {that a} chat software or video convention system must be interoperable with all others,” he goes on. “Or ensuring extensions in productiveness instruments adhere to requirements authorised by Europe — so Libre workplace at all times will work nice with Phrase or Energy Level for example.
“There must be some factor 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 a giant 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 a drawback,” 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 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 resolution to acquire know-how from the U.S. and China for brief time period price financial savings, moderately than making the strategic selection of investing in creating European capabilities.
“Fixing this demand drawback 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 essential Europe wants to not stage the enjoying area however actively tilt it in favor of homegrown tech. “That is most simply achieved by fixing the demand drawback by requiring public procurement (and even perhaps 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 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 a degree off of American GDP by way of fines, it would do little to develop European GDP because it doesn’t essentially create the demand essential 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 direction of the Europe of the longer term.”
“Successive generations of European entrepreneurs with the imaginative and prescient of what must be achieved 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 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 menace of financial “blackmail” underneath the boot of an America First U.S. administration.
“The U.S. government proper now could be displaying they don’t have 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 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 “essential 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 recent startups and innovation” since European tech companies are higher positioned to capitalize vs U.S. counterparts (which skew in direction of proprietary, moderately than open supply).
“Extra authorities contracts have to be awarded to European open supply firms,” he additionally suggests, noting latest 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} normal API specification SECA which permits to deploy and run workloads seamlessly throughout completely different cloud environments,” he notes. “This permits the numerous European service suppliers to collectively kind a community with better scalability and continuity than every can present individually.
“Equally, smaller distributors can and must be inspired to pool assets 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 Huge Tech — “from privateness to antitrust guidelines” — suggesting sturdy motion on compliance may assist transfer the needle. “The Huge Tech companies will not be going through many penalties for his or her gatekeeping and a few basic points round privateness will not be addressed,” he factors out.
Nevertheless 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 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 outdoors European management, warns Caffarra — and that requires a radical new survival technique, not a tweak of the dial.
