European tech companies are facing growing pressure to provide alternatives to Amazon, Google and Microsoft as the European Union looks to reduce its dependence on American technology providers. However, despite new investments in artificial intelligence, cloud computing and data centres, European companies still control only a small share of the continent’s digital infrastructure.
A global Microsoft outage that affected Outlook and Teams users in 74 countries and territories has renewed concerns about Europe’s reliance on a handful of US technology companies. The disruption prevented individuals, businesses and public institutions from accessing emails and online meetings, exposing the risks of depending on digital services operated by a small number of international providers.
Tommaso Valletti, Professor of Economics at Imperial College Business School in London and a former chief competition economist at the European Commission, said the incident demonstrated the disadvantages of relying so heavily on American technology companies.
“The episode shows once again the downside of depending so heavily on a handful of large US tech companies,” Valletti told Euronews Next.
The outage began on Thursday afternoon European time. In the United Kingdom, some doctors’ surgeries asked patients to telephone them if they had urgent medical queries. Microsoft said there was no indication of a cyberattack but had not identified the technical cause of the disruption at the time. Services were gradually restored on Friday.
The incident followed other Microsoft 365 outages in January and August, raising further questions about the reliability of digital infrastructure that millions of people and organisations depend on every day.
The extent of Europe’s dependence becomes clearer when looking at the European cloud computing market. Amazon, Microsoft and Google collectively control approximately 70% of the market, according to Synergy Research Group. European cloud providers account for around 15%, down from approximately 29% in 2017.
This decline highlights the difficulties facing European technology companies trying to compete with established American providers. Germany’s SAP and Deutsche Telekom are among the largest European players, but each holds only around 2% of the continent’s cloud market.
The dependence is not limited to cloud computing. Previous reporting by Euronews has estimated that approximately 80% of Europe’s digital infrastructure and technology comes from outside the European Union. This raises concerns about how much control European governments and businesses have over the systems supporting their economies, public services and communications.
The issue has also become a matter of public interest. According to the latest Eurobarometer survey cited in the report, most EU citizens support the development of European-controlled digital infrastructure. Support was particularly high in Sweden at 94%, Finland at 93% and Denmark at 92%.
For European policymakers, strengthening digital sovereignty has become an important part of reducing dependence on foreign technology providers. The idea is to ensure that Europe has greater control over the infrastructure, data and services that support its digital economy.
The European Parliament is pushing for public institutions to play a greater role in supporting local technology companies. On Wednesday, Members of the European Parliament presented a draft report on the European Commission’s proposed Cloud and AI Development Act. The report calls for public authorities to purchase more cloud services from European providers.
Dutch Green MEP Reinier van Lanschot warned that depending on foreign technology companies for essential systems could leave European institutions exposed to decisions made outside the continent.
“Our critical systems run on someone else’s technology, and someone else can switch it off,” he said.
Concerns about Europe’s digital independence have also increased following developments involving artificial intelligence. In June, Anthropic suspended access to its Claude Fable 5 and Mythos 5 AI models to comply with US export controls. Access was restored on 1 July.
The incident added to discussions about whether European organisations could lose access to important digital tools because of political decisions or regulations in other countries. For policymakers, the question is not simply whether European companies can develop competitive technology, but whether Europe can maintain control over services that are essential to its economy and public institutions.
The European Commission is responding with plans to expand the continent’s technological capacity. It wants to triple the EU’s data centre capacity within five to seven years, while bidding for up to seven EU-backed artificial intelligence gigafactories closed on Thursday.
These investments are intended to strengthen European cloud infrastructure and support the development of artificial intelligence within the bloc. However, Europe still lacks a single technology company with the global reach and resources of Amazon, Google or Microsoft. Instead, potential competitors are emerging in different areas of the technology industry.
In artificial intelligence, France’s Mistral AI has become one of Europe’s most prominent AI companies. The company was valued at 21 billion euros following a 3 billion euro funding round led by Samsung in September. Its growth reflects increasing investment in European artificial intelligence companies as governments and businesses look for alternatives to American-developed AI systems.
Cloud computing is another area where European providers are trying to expand their presence. STACKIT, the cloud services business owned by Germany’s Schwarz Group, the parent company of Lidl and Kaufland, is developing an 11 billion euro AI data centre in Brandenburg, Germany.
The company is also part of a wider group of European providers selected for the European Commission’s sovereign cloud contract, worth up to 180 million euros. French companies OVHcloud and Scaleway, alongside Mistral, were also among those awarded places on the contract in April.
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The selection is significant for European cloud computing companies seeking opportunities to provide services to EU institutions. Government contracts can offer local providers access to major customers while helping public authorities reduce their reliance on international technology suppliers.
Europe is also looking at its position in the hardware industry as demand for artificial intelligence infrastructure increases. Germany’s Infineon is a major manufacturer of power semiconductors, which help supply and manage electricity in the systems used by AI data centres.
Analysts attending the SEMICON Europa trade fair in Munich identified power chips as one of Europe’s strongest opportunities to benefit from the expansion of artificial intelligence. This suggests that European technology companies may be able to compete in specialised areas of the industry even if they cannot immediately challenge American firms across the entire technology market.
However, developing European alternatives is only part of the challenge. Businesses and public institutions must also be willing to switch providers, particularly when established services are already integrated into their daily operations.
Eurobarometer findings show that willingness to pay more for technology services from European providers differs considerably across EU countries. Denmark recorded the highest support at 76%, followed by Sweden and Croatia at 73% each. Estonia recorded the lowest figure at 35%, while Bulgaria and the Czech Republic both stood at 45%.
Businesses face similar questions about cost, reliability and convenience. A survey by Germany’s digital association Bitkom found that 85% of German companies believe the country is too dependent on American cloud providers. However, 71% of those companies also reported using a US cloud provider.
Research by IDC provides another indication of the difficulties facing European cloud companies. Only 4% of European organisations plan to use local providers exclusively. This suggests that most businesses still expect to depend on international cloud services, even as concerns about digital sovereignty increase.
American technology companies are also adapting to Europe’s growing demand for greater control over digital infrastructure. Amazon Web Services launched its European Sovereign Cloud in Brandenburg in January. The service is operated through a separate company based within the European Union, offering a European-based structure for customers concerned about data control and regulatory requirements.
The move shows that American cloud providers are not simply waiting for European competitors to gain ground. They are also adjusting their services to meet some of the demands driving the push for European digital independence.
This creates an additional challenge for local providers. European businesses must compete not only with the existing scale, investment and customer networks of Amazon, Microsoft and Google, but also with changes these companies are making to their European operations.
John Dinsdale, chief analyst at Synergy Research Group, has warned that European cloud providers will struggle to reverse their declining market share.
The European Parliament’s work on the proposed Cloud and AI Development Act is expected to continue over the coming months. Parliamentary committees are scheduled to discuss the draft report on 1 December, with a committee vote provisionally planned for mid-March 2027 and a plenary vote expected in April.
Microsoft has also said it will publish a report explaining the cause of the global outage once all affected services have been fully restored.
Europe’s ambition to build a stronger technology industry is becoming increasingly visible through new investments, government initiatives and the expansion of homegrown AI and cloud companies. However, reducing dependence on American technology providers will require more than developing alternatives. European companies must also build the capacity, competitive pricing, reliability and customer confidence needed to persuade organisations to move away from services they have used for years.
For now, Amazon, Google and Microsoft remain dominant in the European cloud market. Whether European technology companies can eventually change that balance will depend on how successfully the continent turns its digital sovereignty ambitions into commercially competitive services.
