Europe’s path to digital sovereignty
GenAI offers Europe significant economic opportunities. The technology enables new forms of automation that can streamline business processes and make them more efficient, increase productivity, and stimulate and accelerate innovation in various sectors. This will remain the case in the coming years. In fact, the development of GenAI will accelerate in the near future. Agentic AI, driven by GenAI, represents the next wave of automation that can deliver significant value.
At the same time, the current dominance of US cloud services and AI models is leading to strategic dependence for Europe. At present, Europe simply does not have a cloud infrastructure that can compete with that of US tech companies. Nor does Europe have many large language models, with the exception of France’s Mistral. Yet these models form the basis of the current generation of AI applications. All this creates a technological gap that could threaten Europe’s innovative power and digital sovereignty.
Responsible AI development
Various strategies are needed to address these challenges. Firstly, it is important to develop a European cloud infrastructure with integrated AI capabilities. Ideally, this should be based on European legislation and regulations, such as the AI Act, the Digital Services Act, the Data Act, and the GDPR. This will not only reduce dependence on the US, but can also stimulate the sustainable development of technologies, with a focus on water consumption, energy efficiency and CO2 emissions of data centers. A stimulus for responsible AI development, in other words. This can lead to technologies that are more in line with European values.
A second important step is to simplify legislation and regulations to stimulate entrepreneurship. By reducing the burden on small and large companies and making their lives easier, Europe can create a more fertile ecosystem for AI innovation. Make financing more accessible for growing companies, limit bureaucratic obstacles, and create an attractive as possible climate for talented expats.
Investing in education for our own talent is the third pillar. High quality education in AI should start in primary school, where children should not only learn how to use AI, but also learn to develop practical applications.
Finally, Europe would benefit from a more entrepreneurial culture. The current European approach often tends towards perfection, where products must be fully developed, comply with all regulations, and offer a guaranteed return before they get launched. A shift toward a culture that dares to take more risks and innovates more dynamically, even if products are not yet perfect, would benefit Europe’s competitive position.
Balanced approach
In summary, Europe faces a complex challenge in the GenAI era. Complete independence from American technology is not realistic, at least not in the short term. Nor is it necessary, as long as Europe can cooperate with American companies on an equal basis and create a win-win situation.
However, Europe can invest in its own capacities to limit dependency on American suppliers. In short, Europe would do well to opt for a balanced approach: working with international partners where this is beneficial, while at the same time developing its own infrastructure, talent and regulations that are in line with European values and needs. With the right balance, Europe can reap the benefits of GenAI without compromising its digital sovereignty.
Essay by Naser Bakhshi, Partner AI & Data at Deloitte. Published in Management Scope 05 2025.