The past couple of weeks have been very focused on Europe. There's a lot going on in this region, between the ongoing tariff negotiations, trade deals* (concepts of deals?), and general shakeups in the relationship between the EU and the rest of the world. Part of the themes we've covered a lot this year have revolved around the shifts in digital supply chains amidst this chaos. In today's piece, we'll keep the focus on the digital supply chain and Europe specifically, but we'll take a look at something other than tariffs: the EuroStack project.

For the better part of the modern era, most of the world, including Europe, has relied on digital infrastructure developed, maintained, and provided by American companies. So far, the only true competitors at scale have come from China (and we all know how that's going with the whole "national security" thing). This wasn't the largest concern until the past six months, when America decided to shake up traditional relationships and remind everyone that dependencies matter, whether they're physical, digital, or personal.

Here's the uncomfortable reality: Amazon, Microsoft, and Google make up more than two-thirds of the cloud computing market in Europe. Google and Apple run the mobile OS market in the EU. Google dominates the global search market (with American AI giants like OpenAI catching up in that category and creating new ones). Just reading these stats is enough to emphasize how much of a liability it can be to depend on resources that can be weaponized at a moment's notice.

Seems like a fairly straightforward problem, right? Just stop using AWS or Google and use a European infrastructure provider. Well, it's not so easy when there are none to switch to (spoiler alert: there weren't any viable alternatives). I don't mean that in the literal sense, there are European companies in this space (some are mentioned in our earlier piece here). But one thing is having an alternative on paper, and another is having one that you can trust to make the move.

This is where the problem becomes less straightforward to solve: there are fewer than 10 European companies in the world's top 50 tech firms. Innovative players here face much higher levels of regulatory uncertainty than their American counterparts, with fragmentation and a lack of financing options on top of that. It's one of those classic "make it harder for your own companies to compete, then complain when foreign companies dominate" situations. Happens to the best of us no?

So, where does the Euro stack project come in? Described as a “rallying cry to shape Europe’s digital destiny” (buzz word alert), it’s stated values are Sovereignty and Security, Sustainability, Decentralized Sovereign Infrastructure, Strong Democracy, De-Proprietarization and Interoperability, Data as a Common Good, and Inclusive Governance. If you're picking up on themes of long-term independence here then (good), that means you're paying attention.

Essentially, it's a "buy European" strategy with tactical and precise focus on increasing private and public investment in the critical inputs and outputs of the current and future technical stack:

• Critical Resources: Raw Materials, Energy, and Water

• Chips

• Networks

• IoT & Devices

• Cloud

• Software

• Data & AI

Would you look at that? It's basically the same playbook every government uses when they realize they've accidentally handed the keys to the digital kingdom to Big Tech.

The policy side of this initiative is already moving forward. The EU is set to launch their new act, “AI Continent”, in the next few weeks. This includes officials publicly hinting at regulation that will favor European bidders in public procurement processes, without somehow ticking off the World Trade Organization and the agreement on government procurement to treat domestic and overseas bidders equally (uh good luck to those lawyers).

Seems like a good idea for Europe, so what are the risks here?

Well, to start, there's the first risk that faces all organizations: talking a lot about strategy and not implementing any of it. Students of European supply chains may recall the Franco-German Gaia-X initiative, which was spun up in 2019 to develop a federated, secure network of linked digital providers to challenge American dominance in cloud computing (sound familiar?). If you're wondering how well it did... well, here we are discussing a whole new act and policies that seem to be redundant.  The other risk is having the other party (the US in this case) consider these initiatives as overtly hostile and further accelerating what some people consider an already ongoing trade war. Nothing says "digital sovereignty" like a trade spat that makes everything more expensive for everyone.

As we’ve seen, there’s a long history of a lot of talk and not much action when it comes to these kinds of state-level initiatives. However, there's evidence to show that this might actually be the moment when Europe's digital sovereignty comes together.

Those facing this competition (America's Big Tech firms) are actually taking the threat seriously and responding by offering new services like "sovereign cloud offerings" (meant to keep data and control within a specific geography), "air-gapped solutions" (meant to keep data out of other networks entirely), and even talking about taking the US government to court to make sure that customer data is never accessed.

The fact that these firms think it's worth putting up a fight indicates that there's something material happening here. When AWS starts offering "European-only" cloud regions with extra paperwork and compliance theater, you know they're feeling the heat.

If you're running a business that depends on digital infrastructure (so, basically every business), this matters more than you think. Here's why:

Cost implications: European alternatives will likely be more expensive initially, but less vulnerable to geopolitical nonsense.

Compliance advantages: If you're dealing with European customers or regulations, having your data processed by European providers could simplify your life significantly.

Risk diversification: Having options beyond US providers means you're not entirely screwed if the next administration decides to weaponize cloud access.

Talent implications: European tech companies scaling up means more opportunities for technical folks who want to work on infrastructure without dealing with Silicon Valley's particular brand of chaos.

Before we wrap up, I want to take a second for a quick (brag) and highlight how this project aligns perfectly with our original thesis about organizations unwinding their previous technology strategies. Earlier this year, we predicted that organizations would start rotating away from purely US-based cloud and security infrastructure. At the time, we didn't find much quantitative data pointing to these moves happening. Now that some time has passed and people have reflected, it appears that we may be vindicated.

We remain confident in our thesis because the economics are straightforward: no sovereign entity can afford to have their digital infrastructure entirely controlled by foreign powers, especially when those powers have demonstrated a willingness to weaponize access for political gains.

This serves as a preview of the next decade of geopolitics. Digital sovereignty is moving from "nice to have" to "existential requirement," and the EuroStack project is either the blueprint for how to do it right or a case study in how good intentions meet harsh realities. Either way, it’s better than waiting around for more geopolitical chaos to bring down your infrastructure.

• Euro-Stack Contributors. (n.d.). The current Digital Stack. Euro-Stack. Retrieved August 1, 2025 from https://www.euro-stack.info/ (Euro-Stack)
• Can Europe break free of American tech supremacy? Financial Times. Retrieved August 1, 2025 from https://www.ft.com/content/5e25c397-61d1-4b48-b5c5-65561a4c9df2 (Financial Times)
• European Commission. (n.d.). AI-Continent new cloud and AI development act. European Commission - Have your say initiatives. Retrieved August 1, 2025 from https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14628-AI-Continent-new-cloud-and-AI-development-act_en (European Commission)
• Wikipedia Contributors. (n.d.). Gaia-X. Wikipedia. Retrieved August 1, 2025 from https://en.wikipedia.org/wiki/Gaia-X (Wikipedia)