EuroStack: The Urgency of Europe’s Digital Independence

Already, this year’s events, from the AI Action Summit in Paris to discussions at the Munich Security Conference, have made it painfully clear that Europe not only remains dependent on non-European digital infrastructures, but faces an unprecedented questioning of fundamental values by the leadership of the long-time ally across the Atlantic.

At the AI Action Summit, Vice President JD Vance criticised European regulatory approaches, suggesting that overregulation could hinder technological advancement of the US-based Tech-Platforms. This critique and public alignment of the industry with the Trump administration underscore the urgency for Europe to develop its own robust digital frameworks to maintain technological autonomy. ​

Moreover, during the Munich Security Conference, Vance delivered a confrontational speech, asserting that Europe’s internal challenges, such as “illegal migration” and perceived suppression of free speech, pose greater threats than external adversaries.

This was a clear affront to European support for the courageous Ukrainians in their fight against the Russian invaders. His perspective not only questions Europe’s internal policies, but signals a shift in transatlantic relations, emphasising the need for Europe to reassess its strategic dependencies and alliances.

With more than 80 percent of critical digital technologies sourced from outside the continent, and foundational artificial intelligence models overwhelmingly developed in the US and China, Europe’s technological sovereignty remains fragile. This imbalance threatens not just innovation, but economic security, democratic values and long-term competitiveness.

As global supply chains fragment and digital dependencies become geopolitical vulnerabilities, the question is no longer whether Europe should act, but how.

The report EuroStack – A European Alternative for Digital Sovereignty, commissioned by the Bertelsmann Stiftung and supported by a distinguished partner consortium, including the Mercator Foundation, the UCL Institute for Innovation and Public Purpose and the Centre for European Policy Studies, outlines how the EuroStack initiative can help Europe reduce its dependency.

It is meant to offer a pragmatic response via a structured approach to reducing technological dependencies, fostering homegrown innovation, and creating a cohesive European digital market that benefits public and private stakeholders.

“Recognising that complete self-sufficiency is neither feasible nor desirable, the EuroStack initiative calls instead for a shared effort to bolster strategic capabilities and cultivate beneficial international partnerships. It also seeks to demonstrate that digital sovereignty is not about isolation,but about advancing a shared vision of the common good.”​

Martin Hullin, Director, Digitalisation and the Common Good, Bertelsmann Stiftung and a strategic supporter of the initiative

Empirical analysis: The rationale for EuroStack

The EuroStack concept builds on Europe’s industrial and regulatory strengths, advocating for a common digital stack that integrates key digital infrastructure and platforms. The initiative proposes targeted public investments, strategic procurement and regulatory frameworks that prioritise European solutions over dependency on non-European tech giants.

Key findings from the EuroStack 2025 Report highlight three major pain points:

1. Fragmentation in digital infrastructure: The lack of interoperable cloud, AI and data governance frameworks limits scalability and cross-border collaboration within the EU.

Europe’s digital landscape is marked by persistent dependencies and structural inefficiencies that limit its ability to develop competitive, sovereign digital infrastructure.

The fragmentation of digital infrastructure is one of the most pressing issues, as the lack of interoperable cloud frameworks, AI governance structures and cross-border data-sharing mechanisms has led to inefficiencies and regulatory mismatches across EU member states​.

This fragmentation prevents European businesses and public institutions from leveraging shared digital resources, which slows down technological adoption and limits economies of scale.

2. Lagging strategic investments: While the US and China invest aggressively in next-generation technologies, European funding mechanisms remain slow and bureaucratic.

At the same time, lagging strategic investments continue to hinder Europe’s ability to close the gap with the US and China. While both global competitors have deployed aggressive, mission-driven investment strategies to dominate the AI, cloud computing and semiconductor sectors, Europe’s funding mechanisms remain fragmented, slow-moving and overly bureaucratic​.

Without a centralised financial instrument to direct investments into high-impact digital infrastructure, European tech firms struggle to scale, with many critical innovations failing to move beyond the research stage.

3. Vulnerabilities in key sectors: Critical sectors, such as semiconductors, cloud computing and AI, remain reliant on external providers, exposing Europe to economic and political leverage from foreign powers.

This underinvestment exacerbates vulnerabilities in these vital sectors. Europe remains heavily reliant on non-European cloud providers and AI ecosystems, exposing critical industries to supply chain disruptions, economic pressures and external regulatory dependencies. ​

The EuroStack initiative seeks to counteract these vulnerabilities by prioritising public investments in sovereign digital infrastructure, fostering homegrown AI ecosystems and ensuring that European firms retain control over strategic digital assets.

Policy recommendations: Translating EuroStack into action

The EuroStack Report lays out concrete policy actions to address these challenges, moving beyond abstract debates and into implementation. The key recommendations include:

1. Establishing the European Sovereign Technology Fund (ESTF): A dedicated technology investment fund is critical for preventing strategic firms from being acquired by non-European entities, such as ARM and DeepMind. The ESTF would bridge funding gaps, support European startups, and incentivise high-impact R&D in emerging fields, including AI, quantum computing and biotech.

2. Deploying high-impact digital services through the EuroStack Challenge: Inspired by successful US DARPA-style innovation challenges, a EuroStack Challenge could accelerate the deployment of open-source, scalable digital services. These services would focus on key industrial sectors, such as manufacturing, mobility and public administration, to drive Europe’s industrial competitiveness and digital resilience.

3. Scaling innovation through Europe-first procurement policies: Europe’s public sector is the largest single purchaser of digital services, yet procurement policies remain fragmented and favour large non-European providers. A unified, strategic procurement approach would prioritise European-made digital solutions, ensuring that public investments reinforce domestic digital capabilities.

4. Strengthening sovereign AI and federated data spaces: To reduce reliance on American and Chinese AI platforms, the EU must invest in sovereign AI clouds, interoperable data ecosystems and open AI models. These initiatives would not only enhance Europe’s data autonomy, but provide ethical alternatives to big tech-dominated AI ecosystems.

“Europe’s sovereignty requires a technology leap. We are currently importing technologies that undermine our autonomy and our values. The EuroStack is our moonshot moment, the digital evolution of the euro and the single market.”

Prof. Francesca Bria, lead author of the report

Conclusion: From strategy to execution

The EuroStack initiative is more than a policy vision. It is a pragmatic blueprint for action. By leveraging Europe’s industrial strengths, fostering public-private cooperation, and prioritising digital sovereignty, EuroStack can reshape Europe’s digital future. The task is complex, but so is the opportunity for the biggest integration push of the union since the introduction of the euro as the common currency in 1999.

The time to act is now. The alternative – continued reliance on external technologies – would leave Europe vulnerable in an era of rising geopolitical competition.

The European Commission, national governments, civil society and private stakeholders must now move from discussion to execution, ensuring that EuroStack becomes the foundation for a resilient, innovative and sovereign digital Europe.

Further information about the EuroStack can be found on this website

About the authors

Martin Hullin is Director of the Digitalisation and the Common Good programme at the Bertelsmann Stiftung.

Teresa Staiger is project manager for reframe[Tech] at the Bertelsmann Stiftung, where she shaped the project’s strategy on the responsible development and use of generative AI.

This text is licensed under a  Creative Commons Attribution 4.0 International License