Could Trump pull the plug on European tech?

As tensions simmer between Donald Trump and European leaders, the world’s biggest cloud providers have been playing down fears the US president could sever the continent’s access to their services — with potentially disastrous consequences. 

Last month, Trump rolled out an unprecedented package of tariffs on trading partners around the world, sending markets into free fall. In the aftermath, governments and businesses across the European Union have turbocharged efforts to improve tech sovereignty, hoping to reduce the bloc’s dependence on American products and boost homegrown alternatives. 

But the project has brought key vulnerabilities around the cloud, the global network of servers that store and process data for internet users around the world, into focus. Crucially, the majority of Europe’s cloud computing infrastructure is provided by US-based hyperscalers and market leaders AWS (Amazon Web Services), Microsoft Azure and Google Cloud.

Following the recent turbulence, industry insiders say European startups are now rethinking their dependence on the US incumbents, with some consultants even advising founders — particularly those in fintech, e-commerce and AI, which they say are uniquely exposed — to treat reliance on Big Tech as a “geopolitical risk”.

The industry’s two biggest players have sought to soothe customers’ concerns. On Thursday, Microsoft unveiled a set of “digital commitments” to Europe in which the company pledged to “promptly and vigorously contest” any government orders to cease operating there. 

The same day, Business Insider published details of an internal AWS memo, in which company leaders acknowledged concerns Trump could squeeze foreign nation’s cloud access, but said they had “heard nothing” directly from the White House on the matter. Sifted approached Amazon, Google Cloud and Microsoft for comment. 

If Trump succeeded in limiting EU access to the cloud, even marginally, his leverage over the bloc could prove overwhelming. For that reason some experts believe a threat, or even an attempt, to do so remains on the table.

Such a move could prove disastrous. As well as the millions of European businesses Amazon, Microsoft and other US giants count as customers, a number of public services — from universities to healthcare providers and the railways — are too.

“The only thing guaranteed is uncertainty,” says Dmitry Panenkov, CEO and founder of Emma, a cloud management platform based in Luxembourg. “It’s crucial we control what we can as best as we can.” 

Commitment issues

Across Europe, questions over the reliability of US cloud providers have been mounting as Trump rows further and further back on American commitments to the region. 

Any interruption in services provided by Amazon or Microsoft — which between them handle just over 50% of Europe’s cloud computing architecture — would put the sector’s “critical vulnerability” to the test, says Cody Barrow, a former senior official at the US Department of Defence and CEO of Amsterdam-based threat intelligence company EclecticIQ. 

While services probably wouldn’t shut down overnight, Barrow says, companies could struggle to run their day-to-day operations as usual. “Especially in sectors like fintech, e-commerce and AI that rely on scalable, high-performance cloud infrastructure.” 

Disruption to cloud services can cause major issues for businesses and consumers alike. In June 2022, California-based cloud provider Cloudflare experienced a 90-minute outage. The incident briefly brought whole sections of the internet down, rendering companies of all stripes — from gambling site Bet365 and dating platform Grindr to food delivery service Just Eat — unusable. 

“While it’s unlikely the Trump administration would outright block European access to cloud services, there’s a plausible risk of increased protectionist measures,” says Barrow. Such measures might include imposing taxes on the sector, or stricter regulatory controls, such as an executive order complicating the flow of data across the Atlantic. 

Joseph Jarnecki, a research fellow at RUSI (Royal United Services Institute), a London-based defence and security think tank, tells Sifted that Europe alone “does not have sufficient cloud capabilities to meet its needs”. 

Even if European startups were able to muster the back-up resources needed to continue day-to-day operations, Jarnecki warns losing access to a giant like AWS or Microsoft’s cloud would dent ambitions to take a leading role in the AI race. 

“Without hyperscaler involvement, it’s difficult to see how the data storage and processing required for leading AI development and testing could be easily accessed.”

Head in the cloud

As anxieties over Trump’s unpredictability mount, Europeans are keenly seeking alternatives to the status quo — but finding adequate back-ups won’t be easy. 

“For most companies, replacing AWS is not like swapping one vendor for another. It’s an architectural overhaul,” says Ed Barrow, CEO and cofounder of Cloud Capital, a London-based company which helps clients monitor and reduce their cloud expenditure. 

At the time of writing, a handful of European AI cloud infrastructure providers are trying to raise billions of euros of investment, just as calls to bolster the bloc’s tech sovereignty intensify. 

British startup Nscale is looking to raise $2.7bn, according to Bloomberg, in its bid to build out capacity at data centres supplying businesses with AI cloud infrastructure, including access to Nvidia’s most powerful chips. In January it announced plans to invest £2.5bn into UK data centre infrastructure over the next three years.

UK-based Ori, which also provides access to powerful Nvidia chips via the cloud, is fundraising and will be closing by the end of 2025, founder and CEO Mahdi Yahya tells Sifted. The startup, founded in 2018, has already raised $160m in debt and equity.

Compatriot Fluidstack, which announced plans to build a €10bn supercomputer in France earlier this year, is seeking an investment between $100m-200m, Bloomberg reported in February.

Experts point to projects like Gaia-X, an initiative launched in 2019 by former French economic minister Bruno Le Maire and his German counterpart Peter Altmaier, which aims to build an open and interoperable tech infrastructure for European businesses and governments alike. 

But Gaia-X and similar schemes have yet to “reach the minimum threshold for viability”, says Jarnecki, and European businesses may need to take difficult decisions sooner rather than later. 

Cloud Capital is advising finance and tech chiefs in European businesses to treat US cloud exposure as “a form of geopolitical risk”, says Barrow. “A few forward-thinking boards are beginning to ask the right questions: ‘What would it cost to exit [a particular cloud provider]?’, ‘Where are our dependencies?’, ‘How much flexibility do we have to renegotiate our commitments if the macro picture shifts?’”

As European tech companies wrestle with these questions, the difficulties of trading high-performance computing power for strategic autonomy will only become more acute, Jarnecki tells Sifted. “Concerns about the Trump administration are present and growing.” 

He adds: “But paranoia about growth and missing out on innovation are also top of mind.”