Summary of Key Points
To reduce its dependence on foreign players in areas such as AI and semiconductors, the EU has introduced a comprehensive plan for technological sovereignty, covering four main sectors: chips, AI/cloud computing, open source, and energy digitization. However, the implementation of this plan faces numerous practical challenges, including significant technical gaps, a lack of funding, low corporate participation, and limited actual restrictions on U.S. tech companies. There is also skepticism about the balance between achieving sovereignty and maintaining competitiveness.
Why Is the EU Suddenly Pushing for Technological Sovereignty?
In simple terms, it's out of fear of being held at a disadvantage by other nations. According to EU data, 80% of digital products and services rely on foreign suppliers; cloud computing is dominated by companies like Amazon, Google, and Microsoft; and in the field of generative AI, the EU cannot compete with Silicon Valley firms like OpenAI and Anthropic. The EU spends €264 billion annually on U.S. technology. Ursula von der Leyen, the Commission President, emphasized that critical technologies such as hospital operations and power grid stability cannot be dependent on others, as this could leave the EU at the mercy of foreign entities, compromising citizens' safety and interests.
The Four Key Areas of the Plan
The EU aims to address its weaknesses in these four areas:
1. Chip Act 2.0: To develop advanced semiconductor capabilities and balance supply and demand (e.g., enabling Europe to produce its own advanced chips).
2. AI/Cloud Computing Act (CAIDA): To support AI and cloud computing research and development, simplify data center approval processes, and establish a framework for evaluating which companies can provide services to European public sectors.
3. Open Source Strategy: To prioritize the use of European open-source technologies in government departments over foreign products.
4. Energy Digitization Roadmap: To integrate AI models and data centers into the European energy system, ensuring efficiency and security while maintaining control.
Can the EU's "Sovereignty Levels" Really Exclude U.S. Companies?
Although the EU has established four levels of sovereignty, their impact on U.S. companies is limited:
- Level 1 (70% of public data): As long as the data is stored in Europe, it is not affected. U.S. cloud providers already have data centers there.
- Level 2 (20% of data): Foreign governments are prohibited from accessing the data. U.S. companies can still operate if they localize their data processing in Europe.
- Level 3 (9% of data): The EU requires ownership and control, but it allows exceptions for non-EU companies that meet the criteria.
- Level 4 (1% of data): Complete control over the technology stack (hardware and software) is required, but this mainly applies to defense-related data, and currently, no European company meets these standards.
Therefore, U.S. companies can still dominate most of the European cloud computing market, with only the most sensitive 1% being excluded.
Challenges to the Plan's Implementation
- Lack of Funding: The EU plans to build five AI superdata centers, each requiring 100,000 advanced chips, with a total budget of €20 billion. However, the EU is only contributing €4.1 billion, and the remaining funds need to be raised from member states and companies. Currently, only two data centers can be built, with subsidies expected to be available by 2028–2030.
- Low Corporate Interest: The number of interested bidders has decreased from 70 to just 10 consortia. For example, the German Schwarz Group (parent company of Lidl) withdrew due to complex procedures; German telecom companies are hesitant to participate unless their needs are fully met; Spanish telecom companies are only willing to hold a symbolic 10–15% stake.
- Technological Obsolescence: Investment consultants warn that the data centers built now will become obsolete in 3–5 years, and the cost is too high for companies to bear.
Questions Raised by the Outside World
- Technical Gaps: Bloomberg analysts argue that the global AI market is highly polarized, with Western Europe likely being dominated by U.S. models.
- Effect of Regulations: The European Semiconductor Association believes that legislation alone is insufficient; innovation and rapid industrialization are needed to lead the way.
- Balance between Sovereignty and Competitiveness: Researchers in Berlin suggest that EU restrictions on foreign companies may result in Europeans using inferior products.
- U.S. Company Discontent: U.S. industry associations view these measures as discriminatory, limiting competition from international suppliers and reducing user choices.
In summary, while the EU's technological sovereignty plan is ambitious, it faces many practical challenges, including funding shortages, lack of corporate enthusiasm, and significant technical gaps. The EU still has a long way to go before it can truly reduce its dependence on foreign technologies.