Why Europe Needs A sovereign Cloud In The AI Race

Forbes

15-05-2025

BRUSSELS, BELGIUM - APRIL 5 : Flags from the 27 countries of the EU flies in the wind in front of ... More the European Parliament on April 5, 2025 in Brussels, Belgium. (Photo by)
The AI war is on the horizon. The announcements from the United States and China at Davos, followed by Europe's response at the Paris AI Action Summit, attest to that. As with the outset of any conflict, it is instructive to take stock of the forces at play.
The United States leads the pack, largely thanks to its investment firepower. By mid-April, the combined market capitalisation of U.S. tech companies had reached $35 trillion, and cumulative investments in generative AI-focused firms were approaching $90 billion. Those figures are respectively five and fourteen times higher than China's, and eighteen and twenty-two times greater than Europe's. The U.S. also exerts immense pull on human capital, with 60 % of the world's top AI talent residing there. It commands the largest data-centre capacity globally and has secured access to the latest generation microprocessors. Consequently, 59 % of the world's 'significant' LLMs (Large Language Models) originate from the United States.
U.S. Funding and Chinese Patents
China, for its part, pours massive resources into public research and counts 45 of the world's top 100 academic institutions in AI. Between 2019 and 2023, these centres produced 76,000 patents – four times as many as the United States and twenty times more than Europe. Their teams benefit from a uniquely rich data ecosystem in a nation where both state bodies and households are among the most digitised worldwide.
Europe occupies the third spot on the podium, ahead of other AI contenders such as India, the Middle East and Singapore. This continent also ranks third in data-centre capacity, size of its AI specialist pool, production of 'significant' models and number of research papers published.
The anticipated developments in AI are unequivocal: access to computing power and mastery of data-management platforms will be decisive factors in both competitiveness and sovereignty. As one the leading European CEOs put it, 'When I have the choice between Amazon, Google or Microsoft, I'm not entirely at ease.'
Brussels: Plenty of Regulations, Few Champions
The European Commission has taken the lead in drafting an AI Cloud and Development Act, the regulatory pillar of its 'AI Continent' action plan. Legislation matters, but Europe will truly earn its place only if one or two world-class European cloud champions emerge. In France, economic decision-makers have already marshalled support to elevate Mistral from a national rising star to a global unicorn, so why not?
'Access to computing power and mastery of data management platforms will be key factors in both competitiveness and sovereignty.'
To succeed in the sovereign cloud arena, Europe must exorcise its old demons. First, it needs a single, pragmatic regulatory framework untainted by national riders that fragment the market and deny operators the full benefits of scale. Next, it must abandon the idea of one provider per country or, worse, a single 'UN style' player whose governance is paralysed by representation from dozens of member states. Finally, with mergers likely on the horizon, Europe should recognise that the emergence of continental champions need not imperil consumers, in fact, it can help protect them.
Some welcomed Europe's April sanctions on Apple (€500 million) and Meta (€200 million) for flouting the Digital Markets Act (DMA)… but without homegrown champions, those penalties risk feeling like a Pyrrhic victory, their costly triumph having sounded the death knell of its own empire.