EU launches major tech push to break US and China dependence

The European Commission has presented a sweeping tech sovereignty package to boost homegrown technologies and reduce dependency on American and Chinese companies. Whether it will make a meaningful difference — and how the two superpowers will react — remain open questions.

"We live in a world where geopolitics and technology are inseparable. Those who champion technological innovation will shape the future, and we must ensure that Europe plays a leading role in this," European Commission Executive Vice President Henna Virkkunen said.

The package seeks to boost Europe's domestic tech sector, with a heavy focus on cloud infrastructure, AI services, open source and chips.

The EU imports most of its tech services and products from abroad. The digital market is dominated by US giants such as Google, Microsoft and Apple, and Chinese conglomerates such as Alibaba and TikTok-owner ByteDance.

In his landmark report on the languishing state of the European economy, former Italian Prime Minister Mario Draghi argued that most of the recent divergence in GDP growth between the EU and the US could be explained by digital technologies.

Having missed the first wave of the digital economy — the internet-driven services boom — Draghi warned that Europe's last chance to rejoin the international tech race was not to be missed, namely the transformative potential of artificial intelligence.

While growing dependency on foreign technologies had been widely known among European decision-makers for decades, US President Donald Trump's assertive trade agenda and China's willingness to weaponise such dependencies have provided fresh momentum.

Will Brussels' move be enough to shift the dial, or is it too little too late? And what will be the economic cost of severing deeply entrenched dependencies if the EU draws the ire of Washington and Beijing?