This Is Europe’s Shot to Emerge From Silicon Valley’s Shadow

Never let a good crisis go to waste is an adage Europe could use now. As it stares down the barrel of a loaded gun from Donald Trump, the region could seize an opportunity if lawmakers and regulators move quickly to bolster its tech sector, a critical growth driver.

With key services from America like cloud computing and artificial intelligence potentially becoming more expensive, Europe’s homegrown tech industry can reap an immediate advantage. Trump may complain loudly about how the US has been a victim of global trade, but the biggest beneficiaries of the booming AI business have been American. Now so-called hyperscalers – Amazon.com, Microsoft Corp. and Alphabet Inc. – could suffer from Trump’s tariff plans as the steel, aluminum and copper they need to build vast data centers will become costlier.

Those expenses, coupled with the international resentment that Trump is cultivating, could increasingly put off Silicon Valley’s foreign clients. Dutch lawmakers have been calling on the government to stop the flow of Dutch data and apps to American cloud services. Lucky for Europe it doesn’t have to go far for alternatives, like France’s OVH Groupe SA, Italy’s Aruba SpA and Scaleway. The French cloud computing firm, owned by telecommunications giant Illiad SA, has a low-single-digit share of the European cloud market, which is dominated by Amazon, Microsoft and Google. That trio has more than 75% of the market, Scaleway Chief Executive Officer Damien Lucas tells me. He argues that it’s harder for European software makers to innovate because a cut of the value they get goes to Silicon Valley. “Every single innovation in the European Union ends up paying a fee to those US giants,” he says.