Sovereignty matters - as European companies voice distrust of the US Government, what can be done to tackle a transatlantic divide that's getting dangerously wider?

It’s fair to say that relations between the US and Europe are not the best that they’ve ever been. The Trump 2.0 administration has made no secret of its suspicion of the European Union (EU), which MAGA mythology (wrongly) pitches was actually set up specifically to undermine the US, and while the UK is no longer part of the bloc, it can’t help being caught in the crossfire between Washington and Brussels.

And things don’t look likely to improve any time soon if comments by Vice-President JD Vance last week are any indicator:

The Europeans, they’re so friendly in private and they’re willing to make a lot of accommodations and then publicly they attack us and they say, ‘We’re not going to work with the Americans. We’re not going to do anything with the Americans’. I’m sorry - it’s all bogus.’

Sovereign

What the current transatlantic tensions have done is raise the question of sovereign tech higher up the agenda. If Europe perceives that it can’t rely on the US in the same way as it has in the past, then it needs to lessen its dependence on US technology, is the basic argument.

To that end, we’ve recently seen France announce plans to ban government officials from using US collaboration platforms in favor of a home-grown alternative. Those with long memories might recall that back in the day the French Government tried to reject the internet in favor of its own Minitel online and consider how fruitless that stab at nationalism turned out to be.

A major problem for any nation state wanting to declare tech independence from US is that the Europeans long ago cast aside the national tech platform providers that they had backed with protectionist zeal for so long. It’s hard to imagine now, but once upon a time all UK public sector computing was supposed to take place on ICL hardware. But as Aiman Ezzat, CEO of one of the few European tech powerhouses, Capgemini, reminded us at the World Economic Forum gathering in Davos last month:

[Europe] let go of all our hardware players…We did not invest early enough in the cloud to be able to create European cloud players.

The inevitable result:

We have a huge amount of dependency on US technology today.

Money

Now that may be the reality and it may be tempting to dismiss tech sovereignty rhetoric as little more than grandstanding, but there is some sign that the Europeans are putting their money where their mouths are.

According to new data from Forrester, Europe’s technology spending is set to exceed €1.5 trillion for the first time and alongside the inevitable AI as a growth driver for that is what analyst Michael O’Grady calls “a renewed focus on tech sovereignty”. In fact, he says, sovereignty is now a defining theme:

Europe is no longer treating digital sovereignty as a long‑term ambition. Most of Europe’s tech cloud services come from the US, which forces Europe to focus on cloud, security, and data sovereignty and to place legal constraints on US tech firms…Europe’s focus on tech sovereignty will likely re-shape vendor dynamics and infrastructure choices for years to come.

That’s something that US vendors selling overseas are having to factor into their strategies in current climate. Matt Garman, CEO AWS, picked up this theme at Cisco’s AI Summit in California last week:

At Davos probably nearly every single conversation I had with a European company started with, like, ‘Look, we trust you. I don't know if I can trust your country’…I don't know how many times I literally have the question of, ‘What if the US government decides to turn me off? It's a question that many people have, and we assure them like that's very unlikely to happen, [but] it's a concern they have.

Deal with it

That begs the question of how should the likes of Amazon deal with this? Garman argued:

We try to walk them through, like, 'Why?'. That's not really the trade-off they should think about.

But given that this is the state of affairs:

Just two weeks ago, we launched the EU Sovereign Cloud, and I think for the EU, this is actually going to be a fantastic…the idea being that it's a fully separate subsidiary that is incorporated inside of EU, beholden to EU laws, actually as an independent governing board, and and we make sure that every bit of data, including metadata, including account logins, all of that lives inside of the EU region.

We've even tested dis-connecting that whole region from the AWS backbone to make sure that they show [it works]…I think that that works for EU because it's such a large economy in and of itself, but I think we are exploring with a bunch of different things like that to help a bunch of companies around the world grapple with this, where there's obvious trade-offs, but [there are] hard questions.

My take

The sovereign cloud approach is one that has been adopted by a number of other vendors, including Oracle, Salesforce and Workday among others, and is clearly a positive technology solution to the issue. But as Garman alluded to, the problem is less distrust of US tech vendors and more distrust of the current occupant of the Oval Office and what he might wake up one morning and announce on Truth Social.

That being so, and with the prospect of a President Vance and a continuation of current political directions in US a real possibility for another six to 10 years at least, what should Washington be doing to improve relations?

Bret McGurk, Cisco Special Advisor for International Affairs and a former White House advisor under President Biden, talking at the Cisco AI Summit last week, made a point in relation to a wider discussion about security, but it’s one that might apply equally to other aspect of US policy:

I'm a big believer [that] we need partnerships here. Partnerships are key. Partnerships is America's competitive advantage in the world across every aspect of diplomacy, national security, commerce, trade.

He might usefully have caveated that with ‘the right partnerships’ but otherwise she’s quite correct. As for the European side of the equation, it lurches unhelpfully between posturing in the French mode, German capitulation to protect its car industry from the threat of more tariffs, and the UK's delusional clinging on to the nostalgia  of the 'Special Relationship'.

Things ain’t getting better any time soon I fear…