The dependency trap is real.
Allianz released a report this week. It says Europe is getting left behind in the AI trade war. Not because it lacks smarts. Because it lacks leverage. The global economy is pivoting hard toward tech heavyweights. Cloud computing. Data centres. Semiconductors. In those rings, Europe brings a bruised knuckle while the US and Asia bring gloves.
Look at the numbers. AI goods are moving from a $1 trillion industry in 2014. Now. In 2025, that’s $3.8 trillion. Asia eats 65% of those export exports. Seven of the top ten global AI exporters are Asian. Meanwhile, Europe sits there watching the money flow elsewhere.
The US isn’t sleeping. It tripled AI imports since 2023. Why? They’re pouring cash into data centres and cloud infrastructure. Half the world’s data centres sit on American soil. Europe? Only 40% growth in similar imports. An “infrastructure gap” is the polite term Allianz uses. “Crippling deficit” is closer.
The kill switch problem
It’s worse than just being poor at building stuff. It’s about control.
American tech giants own about 40% of Europe’s operational computing power. They are bidding for nearly half the new data centre projects on the continent. They profit because private investment in European tech is weak. Local competitors are non-existent or small fries. The US holds 80% of Europe’s cloud market. 59% of enterprise software revenue. 73% of customer management software. The rest? That’s the scraps everyone else fights over.
The report cites the usual European nightmares: fragmented rules, permitting that moves like molasses, grid connections that don’t work. No domestic hyperscalers. Little state-backed funding. No venture capital flowing fast enough.
“Under that backdrop, Europe is permanently unter the threat of a US ‘kill switch’ on cloud data, meaning the country can turn off services whenever it wants.”
It’s not just the Americans holding the cards. Asia holds the chips. Literally.
Europe needs Graphic Processing Units to train its AI. Where do they come from? Asia. Taiwan, China, South Korea, you know the rest. Europe imports 57% of its IT hardware from those five countries alone. It imports more than half the hardware needed to run its data centres.
It’s a two-sided pinch. The US owns the platform. Asia owns the parts. If Europe doesn’t start building its own house, the walls close in. The service imbalance widens. Markets move abroad. Europe pays the rent.
The dual deficit
The report calls it a “dual deficit”.
Private capital is thin. Public policy is fragmented. Contrast this with the US model where companies drop hundreds of billions into infrastructure. Or China where the state decides something happens and then it happens. In Europe, committees argue for years.
Land in cities is scarce. Environmental regs are tight. Permits are a labyrinth. A data centre project can take four years just to start digging. In some spots it takes five years. Why? Because the power grids are old. They are full. They can’t handle the massive juice drain a new AI hub needs.
Is there any hope? Yes, but it’s a small light in a large dark room.
Europe is still good at industrial engineering. Automated AI? That’s a strength. Regulatory AI? Also strong. France and Sweden are trying to build sovereign computing projects. They want to move public services off AWS and Google. Onto European servers.
They are counterweights. For now, they are modest ones.
