Over the last 10 years, Europe has become the world’s most powerful tech regulator. The biggest issue that presses the continent however is that it doesn’t own most of the technology it regulates, falling behind the US and China.
Currently the numbers are not favorable towards Europe. The American hyperscalers; AWS, Microsoft and Google control around 70% of the European cloud market. Meanwhile European providers’ share has fallen from 29% in 2017 to around 15% today. If you look at the realm of semiconductors, the numbers aren’t great either. Europe produces roughly 10% of the world’s semiconductors but consumes far more than it makes.
So Europe used one of the only weapons it has, legislation. The AI Act came into full force on August 2nd with a new Technological Sovereignty Package to boot in June, including a Cloud Act designed to lock out providers that answer to foreign governments with the fear that another entity holds a geopolitical kill switch over Europeans.
The fear is justified. Last year Microsoft’s French outpost admitted that it couldn’t guarantee French data would never be handed to American authorities as its own law compels it to. Regulation is on one continent with jurisdiction on another.
Ultimately the tension is that a push towards sovereignty isn’t going to solve real existential issues. Building infrastructure is much harder than banning. In 2025, US venture capital for deep tech hit roughly $118 billion. Europe’s was under $15 billion. Mandating your way across tech isn’t going to slow down a race where most of the talent is being drawn across the Atlantic.
