The race for technological supremacy is being fought on many fronts, but the battle over supercomputers and microprocessors is arguably the most crucial. The European Commission believes just so, and its goal to produce 20% of the world’s chips by 2030 is just another proof of the Union’s intention to win the battle. Recently, however, this ambition has faced a new big challenge as the EU’s key ally, the U.S., introduced new rules on technological export. This poses a major challenge, yet also offers a chance to rethink the existing position and overhaul the industry for the better.
***
“AI continent” – this is a new name for Europe coined by the EU’s tech chief Henna Virkkunen. Granted, politicians love to throw names around; yet, this time it’s not just about pretty words but about new reality. AI and supercomputers are no longer just tools for scientists; they’re instruments of national power that are able to drive innovations in nearly everywhere: for instance, an upcoming new world-class Exascale supercomputer, being developed by European Jules Verne consortium, will serve as an accelerator in the precise modeling of climate change impacts, creation of innovative materials, energy sources, and decarbonized transportation solutions, as well as in the generation of digital replicas of the human body that facilitate personalized medicine. The project is based on collaboration of French and Dutch academic research institutes with its industrial partners, and is expected to be built on a highly anticipated high-performance Rhea-2 chip created by French developer SiPearl. Europe’s second Exascale supercomputer, called Alice Recoque, is a very important project for the EU but it is not the only one. In fact, the European High Performance Computing Joint Undertaking (EuroHPC JU) is developing about fifteen projects designed to contribute to the technological leadership and digital autonomy of Europe.
Beyond the mundane, supercomputers can also help solve geopolitical and security problems. This is of particular importance for Europe as the words “cyber war” here is no longer of the sci-fi realm: “The number of hacktivist attacks (against) European infrastructure — threat actors whose main aim is to cause disruption — has doubled from the fourth quarter of 2023 to the first quarter of 2024,” says Juhan Lepassaar, head of the European Union Agency for Cybersecurity. Quantum encryption – which can only be achieved with sufficient computing power – can protect against such problems. At the same time, however, the current geopolitical context gives a hint that European supercomputers themselves need protection, as becomes evident with the introduction of the new American export rules.
U.S. export policies endanger European tech sector
The U.S. administration has recently introduced a rule that will restrict the export of advanced AI chips from American firms to only 18 close U.S. partners, of which only 10 belong to the EU. The initiative is primarily aimed at addressing gaps in U.S. attempts to hinder Chinese AI advancements by complicating Beijing’s access to advanced American technology via third-party nations. Some EU nations, like Germany and France, are listed in the exclusive top-tier group, but others are not. The reason for the exclusion remains unclear, but it probably involves the pro-Russian tendencies of certain leaders and the concern that their geographic closeness to non-allied nations could enable them to serve as export intermediaries.
For the European tech sector as a whole, this uneven application of the restrictions creates a fractured landscape, raising concerns about internal divisions and unfair advantages. The policy of exempting certain EU nations while imposing quotas on others raises a risk of creating a two-tiered system. Companies in unrestricted countries potentially gain a significant competitive edge, having unfettered access to the crucial high-performance microprocessors needed for advanced research and development. This could lead to a concentration of talent and investment in these favored nations, leaving others behind and hindering the development of a truly unified European tech ecosystem. Furthermore, the differential treatment throws a wrench into collaborative European projects and joint initiatives involving partners from both restricted and unrestricted countries.
The latest Stargate project chimed as a final wake-up call. The second day of Donald Trump’s new presidency concluded with the revelation that OpenAI, SoftBank Group, and Oracle will create a venture named Stargate and allocate $500 billion towards AI infrastructure in the United States only. Until then, the European industry had rather high expectations for international cooperation and the building of factories not only in America but in Europe as well: the European Commission’s landmark 2022 chips strategy pinned its faith on Intel’s €30 billion investment in major microchips plant in German Magdeburg. The investment was crucial for the European Union’s pandemic-related objective to increase semiconductor production locally after supply chain disruptions led European carmakers to close factories. However, last fall the company suspended investments and quietly shelved smaller projects in France and Italy.
The announcement of Stargate has only emphasized that the U.S. is primarily focused on its own technological superiority and does not want any competitors. Essentially, this fact raises a fundamental question: can Europe afford reliance on American or any other imported technology in a sector where strategic independence is vital? As the US doubles down on its own semiconductor industry and China is surprising the world with its new AI models like DeepSeek, the fear is that Europe risks becoming a pawn in a high-stakes game, its technological future dictated by policies of other states. Europe is lagging and is trying to catch up, as illustrated by the announcements made at the AI Action Summit held in Paris on 10 and 11 February. The President of the European Commission, Ursula von der Leyen, declared that the EU would mobilise €200 billion for artificial intelligence, while the French President, Emmanuel Macron, pledged €109 billion. Will these statements be implemented quickly and, more importantly, will American companies like Nvidia ultimately benefit to the expense of European ones?
What do we do now?
The current events show that it is high time for Europe to pave its own way to technological independence. The US export restrictions, while a challenge, also present an opportunity for the continent to double down on its own strengths and accelerate the development of indigenous capabilities. A fragmented approach, that the current situation is pushing, will be insufficient. The key lies in a coordinated, pan-European effort to cultivate homegrown talent, companies, and infrastructure. Fostering a vibrant industrial ecosystem is crucial as well, and this means providing seed funding, mentorship programs, and access to research facilities for promising technological ventures.
Europe must encourage the emergence of future technological leaders. SiPearl has already skipped some of the painful early stages most start-ups go through thanks to grants and some private funding. As a recognized enterprise with products designed for use in ambitious projects, SiPearl has some technological advantages like energy savings and its own architecture. And there’s an important feature that comes in handy for ensuring the continent’s cybersecurity: its products contain no hardware or software backdoors, and every component can be audited to provide users with reassurance. In other words, SiPearl can already act as an adequate alternative to imported technologies and, just as importantly, has the right mindset: “Our funding, our R&D, and our industries must be much more at the service of Europeans,” says its head, Philippe Notton. All this, and the booming market, makes the French developer and its counterparts a good enough target for the attention of investors and policy makers aiming for long-term strategies that cover the entire development process of technologies, from basic research to commercialization.
On the other side of the Rhine, another company is making spectacular inroads: Black Semiconductor. Founded in 2020, it has already raised more than €250 million, including €228 million in public funding from the German federal government and the State of North-Rhine-Westphalia. This major commitment from the public authorities is unusual, and can be explained by an awareness of the urgent need to act and by the interest in the technologies developed by Black Seminconductor. The company is proposing to co-integrate optics and electronics to accelerate chip interconnections using graphene. It’s a highly promising approach, not without risk, but one that’s worth banking on. Dr Daniel Schall, co-founder and CEO of Black Semiconductor, promises a “way for faster, more powerful, cost-efficient, and energy-efficient computation”. This is a promise that needs to be supported at European level if it is to benefit the whole continent.
The current market situation shows that the moment is right. Here’s, for instance, the oil and gas industry, which already uses supercomputers in digital geosciences to maintain high efficiency in exploration, supporting safety at work and protecting the environment. To implement the technologies, American giants like Exxon turn to its government and work with the US’s National Center for Supercomputing Applications (NCSA). European companies, however, have no local resources and resort to foreign help: Italian Eni, for example, has built its High Performance Computer 5 (HPC5), one of the most powerful and sustainable computers in the world, on the basis of American Dell. The supercomputer is located in the Italian province of Pavia, which for the moment eases the anxiety about its fate as Italy is now cleared for receiving American tech export. However, there’s no guarantee that the situation won’t change in the future, and this jeopardizes Eni’s technological equality. What’s more, the Italian location gives the U.S. a certain leverage in controlling not only Italy alone, but the region as a whole as Eni is the second largest petroleum company based in the European Union.
Having Europe’s own technology development companies, which do not depend on the favor of foreign partners and are primarily aimed at benefiting its region, can relieve much of this tension not only for Eni, but also for other economically important enterprises in the region, as well as for European politicians. And while the current situation serves as a stark reminder of the importance of the technological sovereignty, Europe still has some (limited) time and opportunities to refocus on a coordinated strategy that prioritizes investment in local R&D, streamlines regulatory processes and champion homegrown talent.
