Let’s cut straight to it: Europe keeps trying to shake its reliance on American and Chinese technology, but the numbers tell a sobering story.
The EU spends roughly €264 billion ($307 billion) annually on digital products and services from outside the bloc. Non-EU companies provide more than 80% of Europe’s digital products, services, infrastructure, and intellectual property. Only four of the world’s 50 biggest tech firms are European.
The dependency splits cleanly: Europe leans on the U.S. for software, cloud services, AI, and online platforms, while relying on China for hardware, components, and critical minerals. In cloud computing specifically, three U.S. giants—Google, Microsoft, and Amazon—control 70% of the European market.
A Proton analysis of over 9,600 publicly listed European companies found that about three-quarters rely on American tech firms to operate their businesses. In Iceland, Norway, Ireland, Finland, and Sweden, that number exceeds 90%. In the UK, 94% of software companies use the American tech stack.
The Chinese Connection
China’s grip is different but equally concerning. Chinese infrastructure from Huawei and ZTE is embedded in many European telecommunications networks. Europe also depends heavily on Chinese rare earths and critical minerals for semiconductor production. An EU-funded report warned in July 2026 that the bloc’s chip sector faces a “bleak future” unless it acts swiftly, squeezed between Chinese export controls and growing dependence on U.S. technology.
Why This Matters Now
The urgency isn’t abstract. In May 2025, the prosecutor of the International Criminal Court lost access to his Microsoft email account after being sanctioned by the White House—a moment that terrified European officials. The fear of a U.S. “kill switch” that could cut off cloud services overnight is now taken seriously in policy circles.
German companies feel it too: 51% now see themselves as “heavily dependent” on the U.S., up from 41% in January 2025.
The EU’s Response
On June 3, 2026, the European Commission unveiled its “Technological Sovereignty Package”—a sweeping plan to slash dependence on foreign tech. It includes a Cloud and AI Development Act, a Chips Act 2.0, and a push for open-source software. The goal is to triple EU data center capacity within five to seven years.
But the price tag is staggering. Estimates suggest replacing non-European tech could cost between €3 trillion and €5 trillion. And success is far from guaranteed.
The Bottom Line
Europe finds itself caught between two tech superpowers, dependent on both in ways that feel increasingly risky. The sovereignty package is a start, but as one EU lawmaker admitted, U.S. providers will likely remain “dominant”. True independence may be less realistic than resilience—managing dependencies rather than eliminating them.
For now, Europe is learning that breaking up is hard to do.
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Technology