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(Bloomberg Opinion) — Nvidia Corp. billionaire boss Jensen Huang, clad in his signature leather jacket,\u00a0has been crisscrossing European capitals\u00a0and sharing\u00a0the stage with the likes of Keir Starmer and Emmanuel Macron as\u00a0he pitches\u00a0\u201csovereign\u201d artificial intelligence, a vision of new data centers offering essential compute power within national borders rather than via dominant tech firms from abroad. But if there were prizes for irony, it\u2019s a concept that\u00a0might win a few. <\/p>\n<\/div>\n
Huang\u2019s pitch\u00a0has understandably struck a chord with leaders desperate for\u00a0new sources of productivity gains and for ways to avoid falling terminally behind in a tech race\u00a0dominated by the US and China. Recent announcements include a partnership with French AI startup Mistral to build a cloud platform powered by 18,000 Nvidia Blackwell chips and\u00a0a Germany-based industrial cloud for European manufacturing built with 10,000 Blackwell chips. It\u2019s not just Europe \u2014 Nvidia has cut big sovereign AI deals in the Middle East \u2014\u00a0but the Old Continent is where Huang sees computing capacity increase by a factor of 10 over the next two years. \u201cIt\u2019s coming,\u201d he said. <\/p>\n<\/div>\n
This doesn\u2019t much look like sovereignty, though. From Nvidia\u2019s point of view, the company\u00a0is certainly\u00a0positioning itself as a geopolitical actor, engaging directly with heads of state like Macron as the ultimate tech enabler to boost AI adoption. That\u2019s good for Nvidia\u00a0amid\u00a0a wider Sino-American trade war that\u2019s seen it lose $15 billion in Chinese sales due to export controls and as Europeans become warier of US tech providers like Alphabet Inc. and Microsoft Corp.\u00a0Bloomberg Intelligence last month estimated sovereign AI investments could add $10 to $15 billion in annual revenue for Nvidia in a de-globalizing world. <\/p>\n<\/div>\n
But from Europe\u2019s point of view, we\u2019re still a long way from the\u00a0tech autonomy leaders like Macron want to offer anxious voters. The hardware and infrastructure\u00a0powering these big AI projects\u00a0are ultimately\u00a0Nvidia\u2019s, a US company with 80% market share whose dominance will be entrenched through\u00a0chips that are updated\u00a0or replaced every few years. To\u00a0the extent that there is a\u00a0European supply chain, it exists elsewhere, in the brainy engineers and open-source models offered by the likes of Mistral. But it remains to be seen if that will be enough to secure Europe\u2019s AI future when US rivals are so dominant. Mistral\u2019s \u20ac1 billion ($1.2 billion) in capital raised so far is a fraction compared with OpenAI\u2019s; and as ambitious as its plans are, Europe today has just 4.8% of estimated global AI compute power, according to Epoch AI. <\/p>\n<\/div>\n
We\u2019ve seen this movie before.\u00a0France and Germany\u00a0once pinned their\u00a0hopes on a sovereign cloud to protect user data from\u00a0the extraterritorial reach of the US and China.\u00a0Today, US tech companies still account for around 70% of cloud services in Europe. And for every attempt to reduce dependence, such as the Danish municipalities quitting Microsoft, there\u2019s an opposite move\u00a0like the German\u00a0military\u2019s cloud deal with Google. In search, European tools promoted as alternatives to Google have relied\u00a0instead on Microsoft\u2019s Bing \u2014 so when Bing went down during last year\u2019s global outage, so did they. Is it any wonder that Microsoft is now offering \u201csovereign\u00a0cloud\u201d services to Europe without a hint of irony? <\/p>\n<\/div>\n
Misnomers and fuzzy language aside, some will argue this won\u2019t\u00a0matter much if Huang\u2019s vision of AI as an essential technology like electricity or the steam engine pays off. At last week\u2019s Research and Applied AI Summit,\u00a0a panel I moderated compared AI sovereignty to a national airline: The flags and operations are what count, not the origin of the aluminum tube\u00a0and its engines. <\/p>\n<\/div>\n
But there have been tangible costs to not worrying enough about dependencies \u2014\u00a0like Russian natural gas or Chinese exports \u2014\u00a0and AI might be the same, according to University of Amsterdam researcher Leevi Saari. With tech still very much driven by globalized supply chains, outsourced labor and dominant vendors, what\u2019s on offer today looks more like \u201csovereignty-as-a-service\u201d \u2014\u00a0the wrapper of autonomy at high cost.\u00a0After all, maybe it\u2019s the existence of alternatives like Airbus SE that makes airlines so relaxed. <\/p>\n<\/div>\n
If AI sovereignty is a worthy goal, Europe\u00a0will need to do more than come up with new wrappings for the same chips. It has advantages: talent, skills, companies like ASML Holding NV and an automotive-industrial base ripe for innovation. But what it lacks is an ecosystem with plentiful research spending,\u00a0financing and end-user demand \u2014\u00a0the kind that\u00a0helped\u00a0US startups raise\u00a0more than double the funding of their European counterparts last year, according to AVP. That won\u2019t be changed in a day, but it should be part of any sovereign vision \u2014\u00a0as should investing in chip independence to secure \u201cgood enough\u201d alternatives and diversify risk, according to Nathan Benaich of Air Street Capital. The alternative, he reckons, is digital colonialism. As China heads down its post-DeepSeek path and the US hugs its hemisphere closer, expect to see Huang\u2019s leather jacket more frequently.\u00a0 <\/p>\n<\/div>\n
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This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. <\/p>\n<\/div>\n