When the European Central Bank's Piero Cipollone stood before an audience in September 2025 and declared that the digital euro is about "protecting our freedom, autonomy and security," he wasn't just talking about currency. He was articulating a fundamental truth that every European business leader needs to understand: we are building our digital future on someone else's foundation, and that foundation is increasingly unstable.
The numbers tell a stark story. Two thirds of card based transactions in the euro area are processed by international payment schemes. In thirteen out of twenty euro area countries, daily commerce depends entirely on these foreign systems. As Cipollone put it bluntly, "This puts us at the mercy of decisions made elsewhere" [1].
But here's what should keep you up at night: the same vulnerability exists across our entire digital infrastructure.
The Dependency We Don't Talk About
American cloud providers control over 70% of Europe's cloud market [2]. Every AI model trained on AWS, every dataset stored in Azure, every application running on Google Cloud is subject to laws and political decisions made in Washington, not Brussels. This isn't a theoretical concern, it's a strategic liability in an era where the US administration has explicitly stated that Europe is no longer a partner, but a competitor.
The implications are profound. Your customer data, your intellectual property, your operational capabilities, all potentially accessible to foreign governments through legal frameworks like the CLOUD Act. All vulnerable to geopolitical disruption if trade relations deteriorate further.
When Governments Lead, Businesses Follow
The German state of Schleswig-Holstein just showed us what digital sovereignty looks like in practice. In October 2025, they completed a comprehensive migration of over 40,000 government mailboxes from Microsoft Exchange to open-source alternatives [3]. This wasn't a cost-cutting exercise. As their Digitalisation Minister stated: "We want to become independent of large tech corporations and ensure digital sovereignty."
Their policy document is even more explicit: "It will be more important than ever to avoid economic or technical dependencies of an individual, monopolistic nature if the state is to maintain control over the IT systems used by it and retain mastery over the data of its citizens and enterprises" [3].
This is happening across Europe. The Austrian military, Danish government agencies, and the French city of Lyon have all made similar moves. This isn't ideology, it's strategic risk management.
The Business Case Is Already Being Made
Perhaps you think this is just a government concern. The data says otherwise.
A recent survey of 800 IT security decision-makers across Germany, France, the Netherlands, and Belgium revealed that 78% of business leaders are more concerned with digital sovereignty than they were a year ago. Even more telling: 70% believe European businesses are too dependent on foreign technology [4].
And here's the critical shift: these concerns are now driving purchasing decisions. When asked what matters most in selecting cybersecurity solutions, strategic autonomy and the ability to deploy on premises or in a chosen environment came first ahead of performance [4].
As HarfangLab's Chief Strategy Officer Anouck Teiller observed: "Performance is the foundation for any serious security provider. But today, this is not enough. Sovereignty has become a measurable business priority: a new cybersecurity KPI" [4].
AI: Where the Stakes Are Highest
Nowhere is this more critical than in Artificial Intelligence. The 2024 Draghi Report on European competitiveness delivered a stark warning: AI operates on a "winner-takes-most" dynamic, and if Europe doesn't scale its own capabilities, it will slide into irrelevance [5].
Consider the current state: only 14% of EU enterprises have implemented AI (16% in Ireland), compared to 58% of US small businesses [2]. Meanwhile, 62% of EU AI postgrads plan to leave for the US or China, where the compute resources and opportunities are concentrated [2].
We're not just losing the AI race - we're training it on someone else's infrastructure, under someone else's rules!
The European Advantage: Compliance as Competitive Moat
But here's where the story gets interesting. Europe has something the rest of the world doesn't: a comprehensive regulatory framework that actually protects citizens and creates a trusted digital ecosystem.
The GDPR set the global standard for data protection. The EU AI Act is now doing the same for artificial intelligence, with specific requirements around transparency, energy consumption reporting, and ethical deployment [6]. The ISO 42001 standard for AI management systems provides a framework for responsible governance.
These aren't burdens, they're competitive advantages for European businesses that embrace them. They create a trusted environment that consumers and partners value. They force a level of rigor and accountability that leads to better, more sustainable AI.
Sustainability Redefined: The Right AI for the Right Job
Speaking of sustainability, there's a dimension to this that goes beyond geopolitics: energy efficiency. Training a single large language model can consume energy equivalent to an average American household over 120 years [7]. The EU AI Act now requires providers of General-Purpose AI models to document and disclose their energy consumption [6].
But here's the opportunity: research from UNESCO shows that using smaller, task-specific AI models instead of massive general-purpose ones can reduce energy consumption by up to 90% without sacrificing accuracy [8]. This principle of "right-sizing", matching the model to the task is both more sustainable and more cost-effective.
European businesses that adopt this approach aren't just complying with regulations; they're demonstrating genuine corporate responsibility and operational excellence.
The Choice Before Us
The evidence is clear. The momentum is building. From payment infrastructure to cloud services to AI platforms, Europe is recognizing that digital sovereignty is not a luxury it's a strategic necessity.
You have a choice to make. You can continue building on rented infrastructure, subject to foreign laws and geopolitical uncertainty. Or you can invest in sovereign alternatives that align with European values, comply with European regulations, and keep control where it belongs: in your hands.
The German government made their choice. Seventy-eight percent of European business leaders are already more concerned about this than they were a year ago. The question is: when will you make yours?
Because in the new era of US-EU competition, your technology stack isn't just an operational decision, it's a strategic one. And the cost of getting it wrong has never been higher.
References
[1] European Central Bank. (2025, September 29). Digital euro: protecting our freedom, autonomy and security
[2] European Economics. (2025, October 21). Europe's AI journey: From dependency to resilience?
[3] ZDNet. (2025, October 13). German state replaces Microsoft Exchange and Outlook with open-source email
[4] HarfangLab. (2025, July 3). European businesses are rethinking digital dependencies
[5] Draghi, M. (2024). The Future of European Competitiveness
[6] White & Case. (2025, April 14). Energy efficiency requirements under the EU AI Act
[7] Cisco. (2025, January 9). Right-sizing artificial intelligence
[8] UNESCO. (2025, July 9). AI Large Language Models: new report shows small changes can reduce energy use by 90%