On November 18, Berlin hosted the first Summit on European Digital Sovereignty. France and Germany used the occasion to unveil a set of new initiatives aimed at strengthening data protection, developing cloud markets, and advancing so-called frontier AI, alongside €12bn ($13.9bn) in promised private investment. But despite its ambitious agenda, the summit still mischaracterised sovereignty as a question of capacity – how much infrastructure Europe can build – rather than control.

While European policymakers continue to insist that digital sovereignty is about self-sufficiency, infrastructure alone does not bring real power. For starters, it is costly to build and often fails to change who controls digital systems. To compete globally, the European Union must focus on the bottlenecks that characterise today’s digital economy – areas where data, value, and decision-making power concentrate – and use these choke points to gain leverage over Big Tech giants. The task ahead is not to construct parallel systems, but to secure Europe’s position within those that already shape global markets.

The political case for digital sovereignty is clear and compelling: the EU remains competitive in industrial production but lags in digital infrastructure and platform technologies. To reduce dependence on foreign providers, it must bolster its technological capabilities.

True sovereignty, however, is not about erecting barriers. It is about controlling the interfaces and standards that can give Europe leverage within global value chains. Whoever governs these bottlenecks wields outsize influence, setting the terms of access for everyone else. In this sense, sovereignty rests on indispensability rather than self-sufficiency.

SAP is a prime example. As one of the few major European players in the enterprise-software sector, its power lies not only in its scale but in its ability to establish the rules and standards of global commerce. By defining how manufacturers, suppliers, and regulators connect and exchange data, SAP occupies a pivotal position within industrial processes worldwide. Sustaining such influence requires control over data architectures, stewardship of interoperability frameworks, and alignment with emerging data-exchange platforms and industrial cloud systems.

ASML, by contrast, shows what happens when European indispensability does not translate into strategic leverage. The company’s cutting-edge lithography machines effectively set technical standards for one of the world’s most critical sectors, advanced semiconductors. But ASML has little interest in turning its dominance into geopolitical influence for fear that politicisation could undermine its commercial standing. EU policymakers, for their part, have failed to use ASML’s unique position to advance the bloc’s interests.

To achieve digital sovereignty, the EU must support firms that develop technologies competitors cannot easily substitute. While international co-operation is essential, it must reinforce – not weaken – Europe’s grip on key layers of the digital stack. When firms are confined to the low-value layers of the stack, they become increasingly dependent on the foreign companies that control data flows, software standards, and update cycles.

German automakers’ dependence on companies like Nvidia, AWS, and Mobileye for the software and computing systems that underpin next-generation vehicles is a striking example of the risks posed by Europe’s current trajectory. With vital components – from simulation tools to perception algorithms and remote-update infrastructure – remaining outside the EU’s control, Europe’s most important manufacturers could end up locked into systems designed elsewhere.

European firms cannot shift these dynamics alone, and the EU cannot regulate its way to digital power. Previous top-down solutions, from the Gaia-X initiative to the Chips Act, have faltered because leverage depends on firm positioning, not regulatory decree. Turning technological strength into a strategic edge requires public-policy support for firms through joint ventures, co-development consortia, and active engagement with sovereign cloud platforms and AI systems.

Infrastructure investment is necessary, but it is not enough. Digital sovereignty must be built from the bottom up, by supporting firms as they strengthen their foothold in the parts of value chains that drive learning, lock-in, and ecosystem co-ordination.

To this end, European governments must back firms willing to take risks by investing in proprietary AI tools, co-developing industry-specific platforms, or regaining control of data management and software-update processes. Crucially, public support should not replace private initiative but rather complement it through procurement, co-investment, and open-standard programmes. Equally important, partnerships with established global providers should be structured so that European firms retain data rights, influence standards, and enhance long-term capabilities.

For EU policymakers, the challenge lies in directing public investment toward the layers of the digital stack where control can still be exercised. This is most realistic in sectors where Europe retains industrial strength, such as sensor-fusion software, robot operating systems, and industrial communication protocols like Open Platform Communications Unified Architecture. These layers channel data flows and influence switching costs, enabling European firms to create dependencies down the value chain.

To be sure, complete EU control is unlikely in highly competitive fields like AI and autonomous driving. But the bloc can still improve its position by establishing the operating practices and procedural norms that determine how these systems connect and communicate.

Above all, the EU must project power not by replicating every layer of America’s digital stack, but by ensuring European firms play a central role in designing the core infrastructures of the digital age. Only then will sovereignty become a source of resilience rather than a pretext for isolation. – Project Syndicate

 

  • Anke Hassel is Professor of Public Policy at the Hertie School, Berlin. Frieder Mitsch is Assistant Professor of Political Science at Waseda University, Tokyo.