EU tech sovereignty: Can Europe break free from US and China?

The European Union wants to control its own digital future. But right now, foreign companies — overwhelmingly American and Chinese — provide more than 80 percent of the digital products and services used across the bloc. That’s the uncomfortable reality the European Commission is trying to change with its newly unveiled Tech Sovereignty Package, presented in early June.

A world of bullies, a bloc on the defensive

The geopolitical backdrop matters here. Trade pressure from Washington, systematic market exclusions by Beijing, and a war on European soil have forced EU policymakers to rethink dependency in almost every strategic domain — energy, defence, and now technology. Some members of the European Parliament have started using blunt language to describe the situation. “We are living in a world of bullies,” one senior Parliament official said during a recent debate on the package. “And bullies exploit dependencies.”

That framing isn’t just rhetoric. It’s the political engine driving this whole conversation.

What the Tech Sovereignty Package actually does

The package bundles together several legislative and investment proposals designed to reduce Europe’s reliance on non-EU tech. Key elements include new rules to boost demand for European cloud infrastructure, tighter screening of foreign technology suppliers in critical sectors, and funding incentives aimed at scaling up homegrown semiconductor and AI capabilities. The EU’s IPCEI — Important Projects of Common European Interest — mechanism is expected to channel billions into strategic tech industries over the next five years.

Still, critics aren’t convinced the ambition matches the architecture. Europe has tried before. The Gaia-X cloud initiative, launched with considerable fanfare in 2020, has delivered far less than promised. Hyperscalers like AWS, Microsoft Azure, and Google Cloud still dominate European enterprise contracts. And that’s not changing overnight.

The gap between vision and capability

The numbers tell a sobering story. European firms account for just 4 percent of the global market capitalisation of tech companies. The bloc has no major social media platform, no dominant mobile operating system, and only a handful of chip manufacturers capable of competing at scale. TSMC and Intel are building fabs on European soil under subsidy agreements — but those plants are years away from full production, and they’re foreign-owned.

So what would genuine tech sovereignty actually require? Experts point to three things: massive sustained public investment, a single digital market that actually functions as one, and a regulatory environment that nurtures startups rather than burying them in compliance costs. Right now, Europe scores inconsistently on all three.

Long road, real stakes

The Tech Sovereignty Package won’t transform Europe’s digital landscape by itself. But it does signal something important — a political consensus, fragile but real, that dependency is a strategic liability the EU can no longer afford to ignore.

Whether the Commission can turn that consensus into concrete capability is the question that will define European tech policy for the rest of this decade. The package is a starting pistol. The race itself has barely begun.