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On June 12, 2026, the White House imposed export restrictions that drastically limited foreign entities’ and individuals’ access to the most advanced artificial intelligence models from the tech giant Anthropic. Overnight, Europe lost the ability to use one of the world’s most powerful AIs, on which many of its companies were already beginning to rely. A sudden decision by the Trump administration was enough to reveal the exorbitant cost of Europe’s dependence on this American cutting‑edge technology. Access has since been restored, but the episode provided yet another proof that the United States is neither reliable as an ally nor as a partner, and it underscored Europe’s urgent push for greater technological sovereignty, now a central element of the continent’s competitiveness and security.
Yet, the debate on this issue is often marked by unrealistic aspirations and impractical ambitions. Europe’s objective cannot be total technological sovereignty; it must instead be selective sovereignty. The strategic challenge, therefore, is not to eliminate all dependencies, but to distinguish those that are most important, those that can be reduced, those that must be mitigated, and those that must be managed deftly so that Europe can defend its interests and its values.
The Emergence of a Categorical Imperative
Europe’s pursuit of strategic autonomy, including sovereignty over technology, predates the AI explosion and the Anthropic episode. Concerns about Europe’s excessive dependence on the United States and China have grown over the past decade. While strategic autonomy began as a directive primarily promoted by France — which other European capitals dismissed as a Parisian form of “direction” — the importance of this political objective now enjoys broad consensus among European leaders. When Emmanuel Macron stressed its importance at the AI Action Summit in Paris in February 2025, he no longer needed to persuade his counterparts. The only question was how long it would take to achieve it.
This ambition becomes all the more urgent as Europeans find themselves caught between the two powers that dominate the AI technology frontier. On key indicators, Beijing and Washington are rightly presented as the undisputed leaders, dominating every layer of the technology stack, from AI models to semiconductors to cloud services and data centers. They concentrate the bulk of talent and attract enormous sums of investment. Europe, lagging far behind, remains particularly vulnerable. Yet its companies do possess certain strengths, notably leading capabilities in robotics. ASML — the Dutch maker of advanced lithography machines used to produce high-end chips — is thus one of the most strategic companies in the AI race. But the gap between European capabilities and those of the United States or China is already too large and continues to widen.
Because of these relative weaknesses, Europe is typically portrayed, at best, as a spectator or, at worst, as a victim. European governments and some companies have long chosen to ignore this innovation lag, relying on American technologies without sustained efforts to reduce their dependence. For years, the Union has banked on its regulatory powers, believing they would steer technological development in line with its values through rights‑protective regulation. But faith in the normative power of the Union has given way to the realization that Europe cannot merely be an arbiter in a world marked by escalating trade and tech wars, deteriorating transatlantic ties, and rising tensions. It must also be a full participant, defending its interests with solid offensive and defensive strategies. Sovereign control over key technologies like AI has become indispensable to protect the continent’s economy, security, and democracy.
In 2024, Mario Draghi’s competitiveness report mobilized minds across the continent. It laid out Europe’s existential challenges and showed how a thriving tech sector is vital to regaining competitiveness.
This objective is also crucial for defense, since there is no security without prosperity. Russia’s invasion of Ukraine and the waning trust in American security guarantees forced Europeans to rebuild their own military capabilities. That requires substantial resources for economies already grappling with high public debt and sluggish growth. Hence Draghi’s report rightly placed competitiveness and technological sovereignty at the forefront of the political agenda. The acceleration of the AI race makes this objective even more urgent and decisive.
Why Europe Should Not Seek Total Sovereignty
A complete sovereignty over AI would imply full — that is, entirely sovereign — control over the entire stack. Yet that stack does not only comprise the modeling layer but also a sophisticated infrastructure — data centers, cloud services — as well as semiconductors, which are essential to training and deploying cutting‑edge AI models. Achieving such control would also demand substantial energy resources to power data centers and mastery of the supply chains for rare earths and other critical materials needed for semiconductors and other hardware components.
Let us first acknowledge an obvious fact: when we talk about the AI race, it is precisely because neither the United States nor China possesses total sovereignty over this technology and it is likely that neither can realistically claim it. AI relies on global, complex supply chains that are impossible to fully control or nationalize. China remains dependent on foreign semiconductors and the equipment required to manufacture them. The United States has, in turn, refused to provide the most advanced chips to preserve its edge in training the most powerful AI models. In return, Beijing has learned to exploit America’s reliance on rare earths, forcing the administration to loosen export controls on semiconductors in exchange for access to these essential minerals. Chips vividly illustrate the scale of these interdependencies: the United States dominates design, Taiwan handles fabrication, the Netherlands supplies key equipment, Japan provides essential chemical components, Korea contributes memory and other elements, while China provides the raw materials. Each country could weaponize its choke points to exert pressure in the AI race. Yet even by acting aggressively, each will remain vulnerable to being exploited by others along the supply chain’s other choke points.
If neither the United States nor China can claim total sovereignty in AI, Europe can claim even less. The continent accumulates far more dependencies and possesses far fewer resources to disentangle itself. It would be dangerous for Europe to pursue a maximalist approach in its quest for sovereignty by cutting itself off entirely from American and Chinese technologies. If European firms cannot access the best technologies — which in AI are still predominantly American and Chinese — adopting such a path risks slowing adoption in Europe. The real value of AI lies in how we integrate it across sectors. Many promised productivity gains from AI have yet to materialize. It is precisely at this crucial stack level, the application layer, that Europe currently has no inherent structural disadvantage — provided it maintains reliable access to the leading models needed to transform its economy.
The objective, therefore, should be selective technological sovereignty. Europe must be strategic while remaining realistic about which dependencies it can live with and which it must mitigate, whether in the short, medium, or long term.
It should prioritize reducing the most sensitive dependencies—those most detrimental if exploited for hostile ends—especially concerning critical infrastructures and essential public services. At the same time, Europe should ambitiously pursue greater intrinsic capabilities across the entire stack, carefully prioritizing its investments.
A Strategy for the Middle Powers
Like other middle powers that do not have the means of the United States or China, Europe faces pivotal strategic choices about how to reduce its technological dependencies. Experts at Chatham House have recently proposed a typology of alternative strategies for middle powers: alignment, hedging, pooling, or specialization.
Alignment involves deliberately lining up with either the United States or China — and thus accepting dependency on one, but not the other — in hopes of obtaining privileged access and other advantages. Hedging consists of relying on several foreign suppliers while selectively developing domestic capabilities. Pooling aims to form partnerships with like‑minded countries to amplify the collective influence of all participants. Lastly, specialization means identifying narrow domains of the global AI supply chain in which a country can build autonomous capabilities, potentially become a global leader, thereby strengthening its bargaining power.
If these four strategies are presented as exclusive, Europe is ideally positioned to combine them: alignment and hedging have clear limits, but pooling and specialization could be fruitfully deployed.
Risky Alignments
Europe should first avoid becoming overly dependent on the United States or China. In the past, alignment with Washington could have seemed a plausible strategy, but it has never been optimal. For decades, Europeans relied on many American technologies, reassured by close economic, political, and military ties underpinning the transatlantic partnership. Under Donald Trump’s second term, the United States became an increasingly unpredictable and unreliable partner: tariffs, assaults on laws and democratic institutions, threats to Greenland, and a withdrawal from security guarantees. This turn of events forced many Europeans to conclude that aligning with a power increasingly hostile to the continent would not only be unwise but dangerous. The recent Anthropic episode shows that the United States can both deprive Europeans of access to American technologies and do so without warning or negotiation.
At the same time, rapprochement with China hardly presents a tempting alternative. Beijing openly seeks to profit from America’s unpredictable policies by presenting itself as a more stable and reliable technology supplier. Yet China has demonstrated its willingness to employ economic coercion as a tool. Its grip on essential raw materials gives it considerable power, and it has already used export controls to restrict Europe’s access to rare earths—critical for the automotive, green, digital, and defense industries. Finally, the People’s Republic remains an authoritarian regime, raising further questions about Europe’s dependence on actors whose political model diverges so radically from its own.
Hedging: a Diversification Strategy
Europe could instead adopt a hedging strategy between the United States and China, using their technologies selectively while deliberately avoiding dependence on a single supply source. This would allow it to pit the superpowers against one another.
When negotiating access to American and Chinese technologies, Europe should use its large market as leverage. China and the United States both want and need access to Europe’s more than 450 million affluent consumers. European companies and individuals thus constitute a significant revenue stream for AI developers in both countries, creating strong incentives to serve this market. This access could, for example, be leveraged to bargain for a “trusted partner” status that would preserve Europe’s access to frontier American AI. At the same time, Europe could negotiate technology transfer agreements as a prerequisite to allowing Chinese tech firms to invest in or operate in Europe. The aim of this hedging strategy is to avoid excessive dependence on either side while strengthening Europe’s bargaining position.
Pooling Capacity Through New Partnerships
Pooling capabilities with other middle powers would further bolster Europe’s bargaining power vis‑à‑vis the United States and China.
Europe has many potential allies and partners with whom to collaborate. Closer partnerships with like‑minded countries such as Australia, Canada, South Korea, and Japan would amplify the collective weight of a coalition of willing countries. None of these middle powers wants to align fully with either the United States or China. Individually they risk becoming targets of economic coercion by one side or the other. Not only do they share common threats, but they also share values that enable trust‑based cooperation aimed at mutual interests. These countries possess key technologies that can be shared to reduce individual vulnerabilities — whether it be access to energy, semiconductors, open‑source AI models, or research and public markets. Such collaboration would allow them to pool resources, achieve economies of scale, and access complementary capabilities, while offering greater resilience against coercive strategies from Beijing and Washington.
Specializing Europe: From Industrial AI to R&D and Defense
The Union should identify areas of specialization to become an industrial leader and a key partner in selected segments of the AI value chain.
Companies like ASML already show that a European society can play a crucial role in pushing the frontier forward. Europe should now proactively seek other domains where its advantages could be developed, expanded, and translated into leadership on a global scale. These domains would require additional investments, guided by a targeted industrial policy, but also by attracting private capital. Beyond these offensive strategies, Europe should safeguard these sectors from acquisitions by non‑European actors by limiting foreign direct investment and even blocking certain takeovers in strategic sectors to ensure that these capabilities remain in Europe. Owning these key assets would give Europe clear economic benefits, but above all a strategic advantage to withstand coercion and negotiate favorable access to the AI value chain segments it does not control.
Industrial AI naturally represents a specialization avenue for Europe. Unlike consumer AI, it yields near‑term productivity gains in robotics, manufacturing, chemistry and materials, logistics, healthcare, energy systems, and industrial operations — precisely the sectors in which Europe remains globally competitive. While attention has recently focused on language models and agents, industrial AI serving the real economy offers vast opportunities that Europe must seize.
In this realm, the continent benefits from a strong industrial heritage with global manufacturing giants such as Siemens, Schneider Electric, Bosch, BASF, and Airbus. Europe remains a leading player in sectors requiring precision engineering, including aerospace components, industrial robots, and medical devices. Its deep engineering expertise and vast reservoir of high‑quality industrial data could be leveraged to drive breakthroughs in industrial AI. While China has made significant progress in applying AI to physical industries and has shown impressive advances in fields like robotics, it has not yet won the entire race. We would be mistaken to abandon the pursuit of “embodied AI” in favor of China. Instead, we should ambitiously integrate AI into sectors where Europe already has real companies and globally recognized expertise. In this regard, the fact that there are now more European startups focused on industrial AI than in the United States indicates that we are already beginning to capitalize on these advantages. These companies must now be able to grow in Europe and become global leaders.
The scientific application of AI, which integrates this technology into R&D processes, offers another promising field for Europe’s global leadership in AI. Europe’s excellence in scientific research lends itself to breakthroughs in chemistry, biology, and pharmaceuticals. Notably by leveraging a well‑developed regulatory framework, Europe could focus on AI solutions for regulated sectors that require particularly reliable technology. In areas such as banking and insurance, the compliance and explainability of AI models and applications are crucial. European companies have long operated within these constraints and could pioneer AI‑driven solutions for efficient and reliable compliance processes.
Finally, geopolitical developments have spurred significant investment in Europe’s defense firms. AI‑driven technologies in physical domains, such as drones, could be a privileged specialization, as could AI‑based systems for intelligence gathering and battlefield planning.
All told, Europe has genuine strategic options. But pursuing AI sovereignty will require a combination of hedging, pooling, and specialization. The right mix among these strategies can reduce Europe’s vulnerabilities, while simultaneously developing its own AI capabilities.
Tapping into American Mistakes
To address the strategic dilemmas it faces, Europe needs a clear understanding of its strengths and weaknesses. It must urgently tackle structural barriers to growth, with the integration of its markets at the top of the list. The Union can look to selectively borrow from certain American and Chinese successes, such as the productive integration of venture capital markets in the United States or China’s focus on AI’s industrial applications. But it must also have the confidence to develop AI in a way that aligns with Europe’s values and strategic priorities.
The main weakness Europe currently bears is market fragmentation. Despite decades of legislative effort, the single market remains incomplete, preventing European firms from flourishing and fully leveraging this vast 450‑million‑consumer economic space, particularly in digital services. Too preoccupied with the tariffs imposed by Donald Trump, the Union sometimes forgets that its own market is its primary partner. It must urgently complete the capital markets integration so that AI startups and other European businesses can fund growth. If these two reforms are implemented ambitiously, they offer the most promising path toward greater technological sovereignty.
Beyond fragmentation, this virtuous trajectory is often challenged by two other real weaknesses. First, the lack of capital to fund AI infrastructure could limit Europe’s ability to build a world‑class ecosystem. Seen in this light, Europe’s ongoing struggle to reap the benefits of the Internet revolution continues to plague a continent without domestic tech giants generating large revenue streams to finance infrastructure development. This stands in stark contrast to the American tech ecosystem, which can mobilize enormous capital for the biggest infrastructure project in history. Second, Europe’s regulatory tendency is often perceived as a brake on European innovation. Critics of the European regulatory state argue that American companies are not subjected to such constraints, granting them leeway to innovate.
An Efficient AI
Nevertheless, these two perceived weaknesses can also become advantages for Europe. First, if it must boost its AI infrastructure investments and build data centers, it should not attempt to match the sheer scale of American infrastructure development. The major Silicon Valley hyperscalers are expected to invest about $800 billion in AI infrastructure in 2026 alone, as they race to maintain the United States’ lead in frontier AI development. Much of this investment goes toward data centers where the most capable models are trained. Yet this expansion hinges on a high‑energy, capital‑intensive model that is increasingly facing resistance in the United States and other regions. Public sentiment against AI has grown, and many projects for data centers have been reconsidered, suspended, or cancelled. Beyond environmental and energy price concerns, users of AI and some firms are beginning to question the costs of deploying high‑capital‑intensity models that are expensive to operate. As a result, many companies are turning to cheaper, “good‑enough” Chinese AI, recognizing that most tasks do not require cutting‑edge, costly models.
Market feedback and public opinion thus offer a valuable lesson for Europe. The American investment boom may not yield expected rewards — and could even be a waste of resources. Anti‑AI sentiment could also curb American ambitions in this area; Europe could avoid that fate by deploying AI more prudently and in a way that serves the public interest. The best course, therefore, is to invest cautiously to build energy‑ and capital‑efficient models that meet growing demand both at home and abroad, without chasing the most advanced capabilities at any cost.
Governing Technology and Building Trust
A second lesson for Europe is that it should not abandon its regulatory inclination. American technological dominance does not stem from a fetish for techno‑libertarianism or unregulated AI. Instead, America’s success rests on a thriving technological ecosystem — bold entrepreneurial culture, a large domestic market, deeply integrated capital markets, and access to global talent. These are the core ingredients that have enabled American tech firms to rise to global leadership — a combination the Union has not yet managed to reproduce. China also regulates AI and has shown that regulation and innovation can coexist. This suggests that Europe’s regulatory stance is not the reason for its lag behind the United States and China in the technology race.
Moreover, as AI model capabilities grow, it is neither strategically sound nor politically feasible to grant AI sector players unlimited power to steer the evolution of this technology. Public discontent and distrust of AI indicate that we need governance that is predictable and protective. Domestic pressures for AI regulation in the United States are intensifying as well. The AI populism movement is gaining ground, potentially limiting AI development and adoption in the United States. Large American firms are now recognizing that they cannot continue to advance the technology without society’s backing. It is also telling that 145 AI‑related bills were enacted at the state level in the United States last year, reflecting growing public support for tighter regulation.
Regulation breeds trust — and trust in AI is essential for society to broadly adopt this technology. Trust is itself a strategic capability. Far from hindering Europe’s AI ambitions, a stable regulatory framework is essential to turning those ambitions into reality. Better regulation can facilitate AI adoption in Europe and drive the economic growth the continent needs. It can also constitute a meaningful comparative advantage for Europe as it seeks to position itself as the leader in trusted AI.
A AI Race Europe Can Win
Those who advocate for a full, total technological sovereignty for Europe are as unconstructive as those who resign themselves to vassalage. The troubling truth is that Europe will not reach such sovereignty in the near future, if ever. The sooner Europeans acknowledge this reality, the sooner they can begin crafting realistic and effective strategies that make the continent less dependent and more resilient. Europe cannot eliminate all its dependencies, but it can manage them wisely.
Recognizing that technological sovereignty is not within easy reach does not mean we are out of options. Europe is a wealthy, talent‑rich continent with global companies, a large internal market, stable institutions, and valuable allies and partners worldwide. What Europe needs today is a new mindset. We should not act as if we are “already convinced of our own decline,” preparing for defeat as an inevitable outcome of the AI race. Rather than resigning, Europe should muster the courage, confidence, and conviction to leverage its many strengths, playing not only in defense but also aggressively in this race. Such renewed ambition would allow Europe to capitalize on those advantages and become a more autonomous power capable of shaping its own AI future.
Finally, Europe must choose which AI race it wishes to lead. This choice itself constitutes an exercise in technological sovereignty. European firms are unlikely to be the first to reach artificial general intelligence frontiers, nor are they likely to persuade the world to adopt a European AI stack. Yet Europe can still win the race that matters most: the large‑scale deployment of AI across its economy and public institutions, in ways that boost Europe’s prosperity, strengthen its security, and safeguard its democracy, while managing the risks this technology poses to its citizens. To succeed, political leaders will need to strike difficult compromises between competing political objectives. But if they approach these trade‑offs with pragmatic ambition, they can deliver to Europe a form of selective yet meaningful technological sovereignty.