In this piece, Aleksandra Szylkiewicz examines the increasingly complex operating environments for tech as greater digital sovereignty becomes a top priority for leaders globally. Rather than setting the rules, tech has become the board on which the game is being played, with governments worldwide now viewing tech players as valuable strategic pieces on the geopolitical chessboard.
After several decades of unchallenged global U.S. tech dominance, transatlantic tensions and broader geopolitical competition have disrupted a previously permissive environment for tech players seeking to flourish across markets and jurisdictions. The new U.S. administration’s approach to foreign relations, including with regards to long-time allies, has set in motion a durable tectonic shift for multinational tech firms, complexifying risks and operating environments from a regulatory, compliance, reputational, financial and security perspective. For decades, big tech players designed the rules of a new daily game of life to players worldwide, but turbulent geopolitics is now wrestling rule-making ability away from big tech. Indeed, as individual tech companies see themselves transform into pieces moving at the whim of players in Washington, Brussels, Delhi, and Beijing, the underlying technologies they build are also becoming the primary board on which geopolitical competition plays out. All this paves a bumpy road ahead for tech sector players, driving risks but also opportunities – in particular for European firms, which will be instrumental in the continent’s efforts to achieve digital sovereignty and strategic autonomy.
Over-reliance on U.S. Tech
Big tech may seem global in its reach, but it is actually overwhelmingly American. This uncomfortable reality has always been a source of tension for leaders in Brussels, which has hectored U.S. tech to comply with market regulations for decades, or in Delhi, where independence from U.S. technology has been a key driver for the development of the “India Stack.” However, U.S. technology dominance was never a crisis for Europe until now, with a confrontational and unpredictable Trump threatening to weaponise it to undermine European strategic autonomy.
Former European Central Bank President Mario Draghi’s 2024 report on the “Future of European Competitiveness” indicates that over 80% of Europe’s digital technologies and infrastructure come from abroad. Germany-based independent foundation Bertelsmann Stiftung points out that the U.S. produces 70% of the world’s foundational AI models, while Europe accounts for 20% of global microchip consumption but manufactures just 9%. The same Bertelsmann Stiftung report indicates that between 2008 and 2021, almost 30% of Europe’s unicorn startups moved their headquarters overseas, primarily to the U.S., underscoring the structural challenges of keeping high-growth companies in the region. According to Synergy Research Group, the U.S. giants AWS, Microsoft Azure, and Google Cloud jointly control close to 70% of the global Infrastructure-as-a-Service (IaaS) market, while European cloud service providers capture merely 10%.
Until recently, the environment has been broadly permissive for unrestrained growth and innovation in the U.S. tech sector, leading to the birth and success of Silicon Valley. As Mike Masnick from Techdirt highlighted in a blog post in March 2025, it was a “complex web of institutions that made innovation possible: courts that would enforce contracts (but not non-competes, allowing ideas to spread quickly and freely across industries), universities that shared research, a financial system that could fund new ideas, and laws that let people actually try those ideas out. And surrounding it all: a fairly stable economy, stability in global markets and (more recently) a strong belief in a global open internet.”
Since U.S. President Donald Trump took office on 20 January 2025, his approach to allies and adversaries alike has sent shockwaves through the U.S.’s established form of governance and the established geopolitical order, throwing U.S. alliances into disarray. Trump threatened and imposed tariffs on longstanding U.S. partners Canada, Mexico, and the EU, demanded trade deals in return for continued security guarantees from Japan and South Korea, (temporarily) cut off military aid and intelligence support to Ukraine, and cast doubt on his willingness to defend NATO allies if they “don’t pay.” More broadly, the new U.S. administration’s drastic change in its foreign policy approach has durably damaged the credibility of the U.S. as a good faith, reliable partner. These new dynamics are exposing risks stemming from European over-reliance on American tech, and prompting a rethink on the old continent, which offers an unparalleled opportunity for the EU to regain tech sovereignty.
Trust Issues
For the U.S.’s international partners, trust built in the U.S. over decades is now at breaking point, and will be difficult to restore. As transatlantic tensions intensify, the European public is increasingly questioning the U.S.’s reliability as an ally and seeking greater independence from U.S. providers it is so heavily reliant on. Even if the U.S. walks back from threats or damaging measures targeting its allies, the erratic nature of Trump’s on-again off-again foreign policy will sustain unpredictability and uncertainty for both governments and businesses that will have to make difficult long-term investment decisions in a highly dynamic environment. Importantly, perceived tech sector alignment with the Trump administration and voluntary enforcement of its anti-DEI (Diversity, Equity & Inclusion) and unregulated tech safety agendas by big players is eroding global trust in American tech products, and will likely lead to the emergence of new challenges for U.S. tech operating globally.
If current trends persist, U.S. allies and partners will soon have engaged in costly strategic shifts. Once committed to these adjustments, they are unlikely to reverse course, even under a less confrontational U.S. administration and U.S. foreign policy. In the meantime, the Trump administration will continue leveraging the country’s military strength, its role as a critical tech provider, its position in global supply chains, and the dominance of the USD as the global reserve currency to pressure allies and adversaries into deals favourable to the U.S. economy and industry. This leverage will — at least temporarily — delay and disrupt Europe’s costly pivot toward greater independence.
Developing indigenous alternatives to replace reliance on U.S. tech products and services will likely happen slowly — but surely. Europe has already launched new efforts to achieve tech sovereignty; appointing its first ever dedicated executive for tech sovereignty, issuing statements of resolve to achieve tech independence, and initiating projects like EuroStack – an independent non-lobby movement which is proposing “a European Industrial Policy initiative bringing together tech, governance and funding for Europe-focused investment” in independent European digital infrastructure. EU member state Poland – whose security fears have spiked due to the U.S.’s u-turn in its approach to Ukraine, with which Poland shares a border – has gone even further, announcing a new unspecified tax on big tech. The first concrete recent initiatives to replace U.S. tech in Europe are also underway, as European companies Airbus, Leonardo and Thales Alenia Space explore a joint venture to increase European satellite production to better compete, notably with Elon Musk’s Starlink. Meanwhile, European leaders have also signalled intent to offset reliance on Musk’s SpaceX for rocket launches, including for European spy satellites, even if costs associated with the likes of the European Space Agency (ESA)-backed Ariane VI rocket will be significantly higher than using a U.S. provider.
Lastly, Trump’s treatment of long-standing allies has revived patriotic sentiment among nations targeted by tariffs and other means of pressure, most notably in Canada. In Europe, casual conversations with peers, friends, and strangers, alongside observations of a growing number of LinkedIn posts by European executives enthusiastically calling for a patriotic approach to the continent’s digital sovereignty, offer an informal barometer that European popular sentiment is turning against the U.S. and its tech.
Bad for Business
Trump’s disruptive approach is significantly increasing the difficulty for U.S. technology firms to maintain their global monopolies, and they will need to struggle to realign themselves for a new, contested era of fragmenting markets and countries favouring tech sovereignty. Where it previously set the rules of the game, tech has now become a board on which the game is being played. Indeed, China’s Xi Jinping recently convened a rare meeting with the country’s tech leaders. The move was reminiscent of Trump’s positioning of his own tech elite behind him during his inauguration speech, signalling that both superpowers view tech as the primary battleground for geopolitical competition. Governments worldwide now see technology players as valuable strategic pieces on a geopolitical chessboard, and everything from access to their citizenry’s data to the construction of physical data centres will be regarded as critical and weighed within a geopolitical context.
In addition to an imminent U.S. economic slowdown, the turbulent waters of geopolitics presage reputational headwinds to U.S. tech brands, threatening revenue and profit bottom lines and posing longer-term risks for operations. Mike Masnick from Techdirt has argued that domestic actions of the current U.S. administration undermine the very openness and stable institutional environment which traditionally fostered tech innovation. Perceived tech overreach and proximity of tech to the Trump administration will not only increase the potential for protest targeting and customer disfavour, but also for regulatory targeting, both domestically and overseas.
In this context, limited resource availability, particularly energy, and the possibility that AI progress may not follow expected exponential growth or maintain broad public support will create financial and reputational risks for AI firms. As governments increasingly use regulations as a geostrategic tool to advance their national interests, and prioritise domestic champions over international hegemons, tech of all flags will also face a more complex risk environment amid growing regulatory fragmentation and greater compliance burden, including legal restrictions on AI model exports. At the same time, taxation and financial policies may become more demanding as states seek revenue to offset defence investments. Tech firms may also face difficulties in securing and maintaining access to certain markets, and battle with expanding state intervention, which, in some jurisdictions, could take the extreme form of partial or total state control.
Data localisation and privacy in particular are likely to see an increase in legislation to safeguard local data storage and limit the exploitation of citizen data by foreign governments. In China, officials have been compiling a list of U.S. tech companies they could target with antitrust probes and other harassment or pressure mechanisms, and have already launched investigations into Google, Nvidia and Intel.
Meanwhile, escalating insider threat, nation-state threats and risks of corporate espionage will strain company resources and increase vulnerability, while U.S. federal workforce cuts could result in diminished public-private sector intelligence sharing that is a crucial enabler for U.S. tech to detect and respond to such threats and risks. More broadly, the centrality of tech in global life also heightens the risk of politically motivated dawn raids or security risks to tech staff worldwide, or internal and external protests or direct action targeting firms that the public associates with AI and data centres and related adverse societal effects – including job losses or negative impact on resources (e.g. power grids, water supplies) and sustainability policies due to extensive energy needs. In the U.S., the extensive energy needs of AI and data centres have already resulted in the backtracking on environmental commitments in several states.
New Opportunities for the Old Continent
The European digital sovereignty movement has been steadily growing in recent years, but it has gained significant traction following Trump’s re-election and the growing consciousness among Europeans that a presidential executive order could force U.S. firms to interrupt service provision. On 14 March, a continuously growing number of European companies and lobby groups (around 100 as of 18 March) issued an open letter to the European Commission, warning that “reliance on non-European technologies will become almost complete in less than three years at current rates.” They called for a stronger commitment to Europe’s technological independence through measures such as ‘Buy European’ requirements for government procurement and subsidies for private sector users to support demand for local tech, as well as the creation of a ‘sovereign infrastructure fund’ to drive investment in capital-intensive sectors like microchips and quantum technology.
Europe will have to make radical changes — and fast — to secure digital sovereignty, which includes favouring strategic investment and implementation decisions over short-term cost-saving approaches offered by U.S. or Chinese offerings. On the upside, investments into the tech sector will continue to boom, now much more so globally as venture capital will likely be looking to identify and invest in up-and-coming domestic champions abroad in order to diversify portfolios. But to achieve its goal of tech independence and competitiveness, European regulators and investment funds will have to be willing to back Europe’s existing and nascent tech champions, ensuring they are accompanied until maturity and listed as critical to national security to prevent them being absorbed by Big Tech. Similarly, Europe cannot afford to see any more of its unicorn startups relocate headquarters overseas, and will need to ensure it provides a structurally sound environment for these young business ventures to thrive at home.
Attracting and keeping top talent will also be crucial for Europe to achieve its strategic objectives, and growing European efforts in that sense will pose an additional risk to U.S. tech. European Central Bank President Christine Lagarde has called on Europe to capitalise on disillusioned U.S. talent, while LinkedIn is already witnessing a rise in European business leaders publicly inviting U.S. talent to reach out and explore opportunities on the continent. In France, research groups have urged the country’s research institutions to welcome American scientists, with Aix Marseille University in March 2025 announcing a call for applications, specifically mentioning U.S. scientists. While there has been growing public backlash across Europe against migration flows from less prosperous parts of the world, any negative public sentiment regarding skilled and educated worker immigration to Europe is highly unlikely to be nearly as pronounced.
Navigating Geopolitical Risks
Effectively understanding and managing geopolitical risks will be more critical than ever for developing successful business strategies. For tech players globally, brand strategy and corporate messaging will have to be more carefully calibrated, and corporate diplomacy by government affairs teams more heavily leveraged than ever to allow for successful operations across different jurisdictions. While major global brands have so far typically transformed local acquisitions into scaled-down versions of their parent company, one potential approach to mitigate against nationalist consumer sentiment and reduce regulatory scrutiny may be to increasingly adopt the identity and attributes of local market leaders. This is also a good time to review standard operating procedures, ensure contingency plans are in place and functional, and that resources are adequately allocated and utilised to navigate this new operating environment.
Importantly, geopolitical risk should be neatly integrated into enterprise risk management efforts. Experienced geopolitical and intelligence advisors — in particular those that already intimately know the organisation they are seeking to support — will be key to seize opportunities and help companies design successful business strategies to navigate the increasingly complex board game in which tech firms will now be both a pawn and the board.
Suggested books for in-depth reading on this topic:
- Unruly: Fighting Back when Geopolitics, Technology, and Law Upend the Rules of Business (Sean West)
- Tech Cold War: The Geopolitics of Technology (Ansgar Baums & Nicholas Butts)
- Political Risk: How Businesses and Organizations Can Anticipate Global Insecurity (Condoleezza Rice & Amy Zegart)
- Bloc by Bloc: How to Build a Global Enterprise for the New Regional Order (Steven Weber)
Additional reading suggestions can be found on our 2025 geopolitical reading list.
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Aleksandra Szylkiewicz is a multilingual security and intelligence professional based in France, currently serving as a geopolitical risk advisor in the U.S. technology sector. She specialises in bridging the gap between geopolitical advisory, security operations, and business strategy, and has served in both consulting and in-house roles. Aleksandra holds a Bachelor’s and Master’s in International Relations/International Security from Sciences Po Paris, and has provided threat monitoring and geopolitical analysis to public and private entities across various sectors and regions, producing actionable intelligence and decision-making support. She has extensive international experience, has lived in Mexico and in various countries across Europe, and is fluent in 6 languages.
Cover image: View of shapes of human faces filled with tech tools facing each other, by Geralt
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