Tech Sovereignty needs demand – to get supply right

EVP Stéphane Séjourné, the EC Commissioner for Industrial Strategy, sent a signal in this direction this week with an oped in multiple European news outlets (here in the French version), supported by nearly 2,000 European entrepreneurs, in favour of introducing a (mild) steer towards European suppliers in public procurement. Of course, convenience and integration matter – and buyers continue to emphasise that this “advantage” of hyperscalers remains a major driver of their current choices (see the discussion at the “Rebuild” conference, specifically the conversations with Philippe Van Damme DDG of DIGIT, and Tim Hoffmann of Mercedes Benz – kudos to both for speaking candidly at the event in the panel on Building European Digital Assets). Yet bundle-to-bundle competition between the three integrated giants – effectively reducing competition to a small number of fully fledged integrated solutions – is undermining the ability of European component suppliers to compete for customer demand, especially as bundle providers are highly effective at locking customers in, and preventing switching. They increasingly run through the digital infrastructures that underpin state capacity and economic continuity: electricity grids, communications backbones, satellite and undersea cables, data centres, identity systems, and the software supply chains built on top of them. But at least for the mid-term, public (and much private) demand will continue to rely on cloud-based applications as the primary frontend for service delivery, data access and user interaction – with the additional complication that for now the strategic focus needs to include the availability and control of AI-capable compute. For instance, Article 346 TFEU allows Member States to take measures necessary to protect their essential security interests and relieves them of obligations that would otherwise apply where disclosure or dependency would undermine those interests.