Microsoft CEO Satya Nadella is much less vocal about his worldview than Palantir’s Alex Karp. And yet, France is taking steps to reduce its reliance on Windows, while its domestic intelligence agency recently renewed its contract with the increasingly controversial data analytics company.
This paradox is representative of Europe’s messy breakup with American technology. After the painful realization that there are strings attached, governments across the region are looking to rely less on US providers. But steps taken so far have been uneven and often reactive.
The CLOUD Act changed the equation
One change to which Europe is reacting is related to Trump’s first presidency. Enacted in 2018, the CLOUD Act forces US-based tech companies to comply with law enforcement requests for data, even if the information is stored abroad. This means that even servers located on European soil no longer provide sufficient assurance when it comes to critical data.
Of all the information that governments hide, health data is arguably the most sensitive. Still, the extra-territorial reach of the CLOUD Act hasn’t stopped the UK from striking deals with companies like Google, Microsoft and Palantir regarding its National Health Service (NHS) data during the pandemic. But if critics have their way, it may eventually follow France’s path.
A year ago, the French government announced that its health data hub would leave Microsoft Azure in favor of a “sovereign cloud.” The contract has now been awarded to Scaleway, a French cloud provider with a rapidly expanding network of data centers across Europe.
Scaleway, a subsidiary of French group Iliad, was also one of four providers that won a €180 million sovereign cloud tender (about $211 million) from the European Commission. AWS European Sovereign Cloud, which Amazon launched to address Europe’s concerns, is not on the list. However, some are concerned that there may still be a backdoor in the US due to a winner using S3NS, a “trusted cloud” joint venture between Thales and Google Cloud.
Europe’s options still face huge hurdles
This would not be the first time that solutions championed as alternatives to Big Tech faced problems due to their inherent dependencies. For example, Quant was once recommended as the default search engine for public servants in France, relying on Microsoft’s Bing – a partnership that turned sour when the French company accused the US giant of abusing its position. The watchdog concerned declined to take action, but Quant had already taken action.
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Teaming up with German nonprofit Ecosia, Quant launched Stan, a Europe-based and privacy-focused search index that could help search engines like them reduce their reliance on Google and Bing. But both partners still lag far behind their US rivals in terms of notoriety and reach – even the slightly more popular Ecosia has about 20 million users, not billions.
Gaining market share is arguably the main issue facing companies challenging the US giants – but public contracts could give them a leg up. For example, the European Commission tender will benefit French cloud providers CleverCloud and OVHCloud, as well as STACKIT, which Lidl’s parent company Schwarz Group created for its own needs but is now commercializing.
The prospect of winning big contracts with European institutions may encourage other players to follow in the footsteps of Germany’s retail giants, or at least, that’s the hope. According to its promoters, “An additional goal of the tender was to encourage the market to offer sovereign digital solutions that comply with EU laws and values.”
However, the Commission’s choice to avoid excessive reliance on a single provider could be a double-edged sword. On the one hand, diversification can provide greater flexibility and assuage dependency concerns. On the other hand, it might not be the best shortcut to fostering Europe’s next trillion-dollar company.
To cynics and pragmatists alike, sovereign technology may seem business-motivated – a way to ensure the euro stays at home. But Europe’s conscious isolation from American technology hasn’t always translated into a contract for its startups. For example, France is abandoning Windows for the open source operating system Linux. Institutions in Austria, Denmark, Italy and Germany are similarly trying to replace Microsoft’s suite of products with open source alternatives like LibreOffice.
This switch has sometimes been accompanied by a “build, don’t buy” philosophy that has drawn criticism. France’s Court of Auditors has questioned spending on in-house tools such as Visio, the purported replacement for Zoom and Microsoft Teams. Financial newspaper Les Echos also reported on the reaction voiced in the tech ecosystem, including this rhetorical question: “If governments don’t lead by example, how can you expect large private companies to follow suit?”
Private buyers can decide the outcome
The truth is that big private companies have not followed it much. German airline Lufthansa chose Elon Musk-backed Starlink for its WiFi service. So did Air France, now also a private airline but still partly controlled by the French and Dutch states – and there is a possibility that France’s state-owned railway operator SNCF could do the same.
Whether large companies opt instead for US providers depends largely on technologically compelling European alternatives. In the dispute with Poland, Musk said “there is no alternative to Starlink” – but European governments intend to prove him wrong. Public sentiment may also play a role, and may not stop many European individuals and officials from leaving the EU.
Not being American is becoming an advantage
After President Trump threatened to annex Greenland, apps boycotting American products rose to the top of the Danish app store — a sign that demand to cut back on American tech is becoming widespread. Pressure on European governments to reconsider their contracts is also growing, and Palantir’s latest mini-manifesto is unlikely to help its cause in the EU and UK.
That the tech billionaire is publicly defending views that many Europeans do not share is also a sign that the divorce is a two-way street. When Meta decided to delay the EU launch of Threads due to European law concerns, it was also a reminder that this region is only a secondary market for the tech giants, and they can ignore it.
On the contrary, it creates a market opportunity for solutions tailored for Europe, its many languages and cultural nuances. This would naturally boost demand in their home markets, with an additional boost if proponents of the Eurostack initiative succeed in making local procurement mandatory for Europe’s public sector.
Europe may want to buy European, but also hopes that “sovereign technology” will be sold abroad. Mistral AI reportedly saw its revenue increase due to having an alternative to OpenAI. Meanwhile, the Canadian and German governments are supporting Foghere’s merger with Aleph Alpha to create a “transatlantic AI powerhouse” to serve businesses and governments around the world. In 2026, being neither American – nor Chinese or Russian – has increasingly become a selling point.
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