This Is Europe's Shot To Emerge From Silicon Valley's Shadow

With key services from America like cloud computing and artificial intelligence potentially becoming more expensive, Europe's homegrown tech industry can reap an immediate advantage. Trump may complain loudly about how the US has been a victim of global trade, but the biggest beneficiaries of the booming AI business have been American. Now so-called hyperscalers - Amazon.com, Microsoft and Google - could suffer from Trump's tariff plans as the steel, aluminium and copper they need to build vast data centres will become costlier.

Those expenses, coupled with the international resentment that Trump is cultivating, could increasingly put off Silicon Valley's foreign clients.

Dutch lawmakers have been calling on the government to stop the flow of Dutch data and apps to American cloud services. Lucky for Europe it doesn't have to go far for alternatives, like France's OVH Groupe, Italy's Aruba and Scaleway. The French cloud computing firm, owned by telecommunications giant Illiad, has a low-single-digit share of the European cloud market, which is dominated by Amazon, Microsoft and Google. That trio has more than 75 of the market, Scaleway CEO Damien Lucas says. He argues that it's harder for European software makers to innovate because a cut of the value they get goes to Silicon Valley. "Every single innovation in the EU ends up paying a fee to those US giants," he says.

The EU's AI Act was a prescient and noble effort to fill the regulatory vacuum on AI, but it is mired in bloat and lacks specifics - something the new Action Plan seeks to address. If officials can seize the opportunity to move quickly and update the legislation to make it clearer, that could help the bloc's competitiveness and the broader roll-out of AI. Only 13 of European companies adopted AI tools in 2024, according to Eurostat.

Trump's tariff war may end up being be the geopolitical catalyst that Europe's tech sector needed. Rather than wasting energy on retaliatory measures, leaders here should channel their efforts into strategic tech investments, streamlining regulations and a deepening the single market. The region has long possessed the intellectual capital for greater technological self-sufficiency. Maybe it was just missing the existential urgency this trade crisis now provides. For savvy European policymakers and tech entrepreneurs, this is an opportunity to be seized, and one that could finally transform the region from a digital colony of Big Tech to its own technological powerhouse. Parmy Olson, c 2025 Bloomberg LP