EU tech sovereignty plan and its impact (with Tom Mackenzie, Anna Edwards, Guy Johnson)

Asks if the EU's plan is the correct prescription and if they can get it done.

Tom Mackenzie

Kirsten Rulf

Expectations in the European Commission are high, but she is more cautious. The proposal has a lot that needs to be realized, especially financing. The shift from supply to creating demand on chips, data centers, and frontier AI is a big bet.

The European Competitiveness Fund is still under negotiation. There's a long time for implementation (Q4 2027).

Asks if sovereignty comes at the expense of competitiveness.

Tom Mackenzie

Kirsten Rulf

Yes, that's the feeling in most companies. There is a very fuzzy definition of sovereignty in the EU. Global companies face different tech stacks from the US, China, and now Europe, causing confusion.

The package brings more clarity, but implementation is far off.

Asks about opportunities for European businesses to scale up in protected parts of the tech stack.

Anna Edwards

Kirsten Rulf

The Chips Act 2.0 and Cloud/AI Development Act aim to scale European capabilities in semiconductors and frontier AI. The subsidy package for European cloud providers is significant, with levels where US/Chinese hyperscalers cannot participate.

This is a big subsidy package based on the European Competitiveness Fund, which is still under negotiation.

Asks how it will be paid for, given rising costs of memory and AI.

Anna Edwards

Kirsten Rulf

It will be expensive for several players. Sovereign cloud products come with a 25% price premium. Building cutting-edge AI chips in Europe will cost a lot of tax money. Consumers will face higher prices.

Asks how Trump will respond to the EU plan, given the US tech industry will call it unfair.

Guy Johnson

Kirsten Rulf

The package is bolder than expected, but the language is nuanced. It could have been worse for US incumbents. European businesses know they depend on US innovation for a long time. There will be rhetoric, but the US needs Europe as a market.

Latest research shows a slight shifting away from US tech, but the US is still a necessary partner.

SignalTube