Europe pushes for sovereign tech to reduce reliance on US providers

Governments across Europe are actively looking to rely less on American tech providers. This shift has been accelerated by the CLOUD Act—a U.S. law enacted in 2018 that forces U.S.-based tech companies to comply with law enforcement requests for data even if the information is stored abroad. Under this regulatory landscape, storing data on European soil is no longer seen as a sufficient guarantee of privacy. The tension is particularly clear when managing sensitive health data. One year ago, the French government announced that its Health Data Hub would be leaving Microsoft Azure in favor of a sovereign cloud, which is cloud infrastructure controlled by local entities to comply with local laws.

To support this transition, the European Commission is backing local alternatives with substantial public funding. The institution recently awarded a sovereign cloud tender worth approximately $211 million (€180 million) to European providers, including the French cloud provider Scaleway. Promoters of the tender stated that an additional goal of the initiative was to encourage the market to offer sovereign digital solutions that comply with EU laws and values. While some European public contracts still involve joint ventures with U.S. firms, the explicit goal of these tenders is to build up domestic infrastructure.

However, building viable domestic alternatives to U.S. tech giants remains a steep challenge. Search engines like Qwant and its partner Ecosia, a German search engine with about 20 million users, still struggle to match the scale of their American rivals. Qwant previously relied on Microsoft’s Bing, a partnership that deteriorated after the French company accused the U.S. giant of abusing its position. Meanwhile, European governments face internal criticism over their procurement choices. While France is replacing Windows with open-source alternatives, and institutions in Austria, Denmark, Italy, and Germany are exploring similar moves, voices across the tech ecosystem have raised concerns, asking, “If the government doesn’t lead by example, how can you expect large private companies to follow?” Indeed, private buyers often continue to favor U.S. options; for instance, during a dispute with Poland, Elon Musk asserted that there is no substitute for Starlink. Yet, for European startups like Mistral AI, not being American is increasingly a selling point. The demand for non-U.S. alternatives is also rising among the public, as seen in Denmark where apps boycotting American products surged following U.S. political threats regarding Greenland. This shifting sentiment is putting pressure on European governments to reconsider contracts with U.S. providers, including Palantir, an increasingly controversial data analytics company.

Why it matters

Governments across Europe are actively seeking to reduce reliance on American tech providers due to concerns over the U.S. CLOUD Act and a desire for sovereign digital solutions, creating market opportunities for local alternatives.