Several European governments are trying to reduce their dependence on American software, cloud platforms, and digital infrastructure as debates around data control, political influence, and technological independence become more intense across the region.
The situation has exposed contradictions in Europe’s relationship with U.S. technology companies. Microsoft chief executive Satya Nadella has largely stayed away from the kind of political messaging often associated with Alex Karp. Despite this difference, France has started moving parts of its public systems away from Microsoft Windows while simultaneously renewing contracts linked to Palantir Technologies through its domestic intelligence agency.
This complicated approach shows how Europe is attempting to distance itself from American tech firms without fully breaking away from them. Many governments now believe that relying too heavily on foreign technology companies can also mean depending on foreign laws, political priorities, and corporate influence. Still, Europe’s response has not followed one common strategy, with many actions appearing fragmented or reactive.
Much of the debate intensified after the U.S. passed the CLOUD Act in 2018 during President Donald Trump’s first term. The law gives American authorities the ability to request data from U.S.-based technology companies even if that information is stored outside the United States. For European officials, this raised concerns that storing data inside Europe may no longer be enough to fully protect sensitive information from foreign legal access.
Healthcare data quickly became one of the strongest examples used in these discussions. Medical records are considered among the most sensitive forms of information governments hold because they contain deeply personal details tied to citizens. Even after the CLOUD Act came into force, the United Kingdom partnered with companies including Google, Microsoft, and Palantir Technologies during the COVID-19 pandemic for projects involving National Health Service data.
Critics have argued that such partnerships could expose public-sector information to outside influence. France later decided that its Health Data Hub would stop using Microsoft Azure infrastructure and move toward what officials described as a sovereign cloud model. The contract was awarded to Scaleway, a cloud provider owned by French telecommunications group Iliad. Scaleway has also been expanding its network of data centers across Europe.
Scaleway later became one of four companies selected in a €180 million sovereign cloud contract backed by the European Commission. The program is intended to support cloud services that operate under European legal and regulatory standards. Notably, the European Sovereign Cloud initiative launched by Amazon Web Services was not included among the selected providers, even though Amazon created the project to answer European concerns about digital sovereignty.
Questions have also emerged around whether some so-called sovereign alternatives remain partly tied to American technology companies underneath. Some observers pointed to S3NS, a joint venture involving French defense company Thales Group and Google Cloud. Critics worry that arrangements like these could still leave room for indirect U.S. access or legal exposure despite being promoted as trusted European solutions.
Europe has faced similar problems in the search engine market. French search company Qwant was previously recommended for public servants in France while relying on Microsoft Bing’s underlying search infrastructure. The relationship later deteriorated after Qwant accused Microsoft of taking advantage of its dominant position in the market. Although French regulators declined to act against Microsoft, Qwant eventually started searching for alternatives on its own.
Qwant later partnered with German nonprofit search platform Ecosia to launch Staan, a Europe-based search index designed to reduce reliance on Google and Bing technologies. The project focuses on privacy and regional control over search infrastructure. Even so, both companies remain far smaller than their American competitors. Ecosia, despite having around 20 million users, still operates on a completely different scale compared to Google’s global user base.
One of the biggest problems facing European technology firms is market dominance from American companies. U.S. providers continue to control large parts of cloud computing, enterprise software, internet search, and artificial intelligence markets because of their global infrastructure, financial resources, and established ecosystems. European officials hope that large public-sector contracts could help regional providers compete more effectively.
Besides Scaleway, the European Commission’s sovereign cloud program also selected French companies Clever Cloud and OVHcloud, along with STACKIT. STACKIT was developed by the Schwarz Group, the parent company of Lidl, originally for its own internal systems before later being turned into a commercial cloud service.
Supporters of the initiative believe government-backed contracts could encourage more European companies to invest in domestic infrastructure instead of depending on foreign cloud providers. Backers of the program have also said the project aims to encourage digital solutions that align with European laws, governance rules, and privacy standards.
Still, Europe’s strategy of distributing contracts across several companies may create another challenge. While diversification could reduce dependence on one dominant provider and improve resilience, it may also make it harder for Europe to build a single technology giant capable of competing globally with firms such as Microsoft, Amazon, or Google.
Some critics also view sovereign tech partly as an economic strategy meant to keep European spending within the region. However, Europe’s attempts to move away from U.S. technology have not always translated into direct support for startups. In several cases, governments have instead turned toward open-source software alternatives.
France has already started replacing parts of its Windows-based systems with Linux. Public institutions in Germany, Denmark, Austria, and Italy are also exploring alternatives to Microsoft’s office software products through platforms such as LibreOffice.
Several governments have also embraced a “build instead of buy” approach by creating internal software tools. That strategy has faced criticism from parts of the technology and financial sectors. France’s Court of Auditors reportedly questioned spending linked to Visio, an internally developed platform intended to act as an alternative to Zoom and Microsoft Teams.
French newspaper Les Echos also reported frustration from parts of the country’s technology sector. Some critics argued that if governments themselves do not consistently adopt domestic technology tools, it becomes difficult to convince large private companies to do the same.
Many giants of European businesses continue selecting American technology providers when they offer stronger technical or commercial advantages. German airline Lufthansa chose Starlink for onboard internet services. Air France also selected Starlink despite partial ownership ties to the French and Dutch governments. Reports have additionally suggested that France’s national railway operator SNCF may eventually adopt similar services.
The debate around European alternatives has become particularly visible in satellite communications. During a disagreement involving Poland, Elon Musk stated publicly that “there is no substitute for Starlink.” European governments are now trying to prove otherwise by investing in domestic telecommunications and space infrastructure projects.
Public sentiment has also started influencing the discussion. After President Trump threatened to take control of Greenland, applications encouraging consumers to boycott American products surged in popularity on Denmark’s App Store rankings. The reaction showed that calls to reduce dependence on U.S. companies are no longer limited to policymakers and regulators.
Pressure is also building on European governments to reconsider contracts involving controversial American firms. Palantir’s recent public messaging and political positioning have drawn criticism inside parts of the European Union and the United Kingdom. At the same time, many European officials and citizens have started distancing themselves from X, formerly Twitter, because of growing dissatisfaction around platform governance and political discourse.
American technology companies have also shown that Europe is not always their top commercial priority. When Meta delayed the European release of Threads because of regulatory concerns tied to EU laws, it reinforced the perception that large U.S. firms can afford to deprioritize the region when legal requirements become too restrictive.
At the same time, this environment is opening new opportunities for companies building products specifically designed for European markets, languages, and legal standards. Supporters of the EuroStack initiative are pushing for rules that would encourage or require public institutions to purchase locally developed technology whenever possible.
Backers of sovereign tech also hope European companies can eventually compete internationally rather than only within domestic markets. French artificial intelligence company Mistral AI has reportedly experienced strong revenue growth as some businesses search for alternatives to OpenAI. Meanwhile, the governments of Canada and Germany are supporting cooperation between Cohere and Aleph Alpha to create what supporters describe as a transatlantic AI platform for governments and businesses.
As geopolitical tensions continue reshaping the global technology industry, some companies are discovering that not being American, Chinese, or Russian is itself becoming a commercial advantage in international markets.
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