AI & tech weekly briefing – 21st July 2025
Europe is not only waking up, it's leaping out of bed
As Washington flirts with retrenchment and American tech giants continue to dominate everything from intelligence to cloud, Europe’s leaders are finally sounding the digital sovereignty alarm. A deep FT dive this week highlighted how Trump’s transactional approach to transatlantic relations has nudged Brussels into strategic rethink.
With Google, Amazon, and Microsoft controlling two-thirds of Europe’s cloud market, and US law (not EU) often deciding access to that data, policymakers are scrambling to reduce reliance, whether by favouring local firms like, promoting sovereign cloud solutions, or reviving long-stalled initiatives like EuroStack. The Commission is preparing a new cloud and AI infrastructure act for later this year, but the risks of sluggish execution, patchy financing, and plain old market inertia loom large.
As Proton CEO Andy Yen bluntly put it: if Europe doesn’t build its own tech now, it may be out of the 21st century game altogether.
Europe is wrestling with its deep dependence on U.S. tech giants. Amazon, Microsoft, Google, Apple and OpenAI dominate our cloud infrastructure, AI, search, OS, and social. Politicians are catching up with general euro-entrepreneurial sentiment about European "tech sovereignty." The appointment of Commissioner Henna Virkkunen (now including "tech sovereignty" in her title) signals intent to bolster Europe’s capabilities.
Domestic tech faces headwinds: Europe lacks scale and funding, with just a few local players in the global top 50, while venture capital lags far behind the U.S. (€139 billion vs. ~€40 billion). Hyperscalers are responding – AWS, Microsoft, Google offering “European sovereign cloud” services – critics warn of “sovereignty washing” unless structural investment in talent and infrastructure scales up.
There are strong stories everywhere and governments must try harder to pare back the regulatory environment and open up tax zones to encourage start and scale businesses.
France’s Mistral AI exemplifies such a success story: securing backing and delivering EU-centric models, but remains an outlier among lagging European AI players.
Lovable is another stellar story. Europe’s ninth unicorn of 2025. Proof that the continent can spawn global-scale AI champions outside Silicon Valley. It’s one of Europe’s fastest-growing AI firms, boasting the largest-ever Series A in Sweden. Lovable’s "vibe coding" platform empowers non-technical users, 99% of the population to build production-grade apps and websites through natural language prompts, significantly lowering technical barriers.
Europe now stands at a crucial junction: regulatory and procurement tools offer pathways to autonomy, and with real investment and scaled local alternatives, digital sovereignty in Europe can very much be a viable positive next chapter for the continent.
🖥️ Tech & AI developments
EU tech sovereignty push intensifies: Europe is doubling down on building its own cloud, quantum, semiconductor, and AI infrastructure to reduce dependence on U.S. giants. Plans include a proposed “Buy European Act” and the €300 billion EuroStack fund
OpenAI and UK sign 'strategic partnership' in investment push This voluntary memorandum will see OpenAI invest in UK AI infrastructure (like data centres, workforce) and embed tech into sectors such as justice, defence, and education. The UK also struck similar deals with Anthropic and Cohere as part of a £2 billion AI growth strategy, though critics warn it could deepen dependence on U.S. companies ft.com
Meta snubs voluntary EU AI code: Meta refuses to sign the EU’s non‑binding code of practice for general-purpose AI, citing legal overreach, OpenAI pledges to comply theverge.com
Helsing rises as a defense‑tech champion: Munich-based Helsing secured €600 million at a €12 billion valuation to develop autonomous drones, AI‑driven fighter jet guidance, and submarine‑tracking sea gliders The Wall Street Journal
Public consultation on high‑risk AI systems: The EU is seeking stakeholder feedback on the classification and regulation of “high-risk” AI under the AI Act until mid‑July CDT Europe
Mistral AI launching European compute platform: France’s Mistral AI will debut “Mistral Compute” in 2026—an Nvidia‑powered cloud platform designed for AI development across Europe techcrunch.com 💚 🇫🇷
📈 💹 Related market & economic data
July 17: Alphabet shares rose 1.8%, closing at $183.47, amid cautious optimism ahead of its quarterly earnings. Analysts remain bullish but flagged rising threats to Google's ad revenues from generative AI-driven search alternatives marketwatch.com
July 18: UK’s AI audit sector valuation nears £1 billion, buoyed by incoming regulation. British Standards Institution’s new international audit standard (effective July 31) prompted a surge in UK-based AI assurance providers’ market interest, anticipating stricter AI governance demands ft.com
📘 Reads and listens this week
📘 Can Europe break free of American tech supremacy?, Barbara Moens, The Financial Times