Brussels' AI Investment Strategy Risks Reinforcing Big Tech Dominance

As European governments accelerate their investments in artificial intelligence (AI) technologies, a new report raises concerns that these efforts may inadvertently bolster the dominance of U.S. tech giants like Microsoft and Amazon. The report, published by the Dutch non-profit organization SOMO on July 7, 2025, highlights a troubling trend: Europe's burgeoning AI start-ups are increasingly reliant on the hardware and cloud services provided by a select group of powerful American companies.

The report's author, Margarida Silva, emphasizes that while these AI start-ups may appear to be formidable challengers in the tech landscape, their operations are fundamentally supported by the infrastructure set up by companies such as Nvidia, Amazon, Google, and Microsoft. "On the surface, these start-ups look like fresh challengers," Silva stated. "But scratch a little deeper and you’ll see they’re built on foundations laid by Nvidia, Amazon, Google, and Microsoft."

A critical aspect of this dependency is the computing power required to train advanced AI models. According to SOMO, 11 out of the 12 leading generative AI start-ups depend on Nvidia's specialized chips, which have become the industry standard due to their computational capabilities and proprietary software. Furthermore, the report reveals that 10 of these 12 start-ups utilize cloud services from major providers, including Microsoft, Amazon, and Google, to deploy their AI models.

In exchange for access to these essential resources, Big Tech companies often negotiate exclusive rights to distribute the AI models developed by start-ups. For instance, Microsoft has made significant investments in French start-up Mistral, granting it first access to its models through the Azure cloud platform. This arrangement has sparked controversy within the European Parliament, particularly as the recently adopted EU Act aims to reduce reliance on American tech firms.

The report also notes that Big Tech firms are positioned as gatekeepers in the AI market. Nine of the 12 start-ups analyzed host their models on platforms operated by Amazon, Microsoft, or Google, effectively controlling access for businesses and public institutions seeking to implement AI solutions. A notable example is the European Parliament’s selection of the Claude model, developed by Anthropic, for managing its digital archives, a choice limited to models offered through Amazon Web Services, which holds an EU contract.

SOMO's findings raise significant questions about the effectiveness of Europe's strategy to enhance its competitiveness in the AI sector. Despite substantial investments aimed at fostering local AI capabilities, the report warns that such support could inadvertently entrench U.S. dominance in the market. Silva cautions, "Europe wants to build its own AI capacity, but the foundations are still controlled by a handful of American companies."

To address these concerns, SOMO urges EU and national competition authorities to investigate cloud contracts, limit market concentration, and improve the feasibility of switching service providers. The report warns that without timely intervention, the AI industry may mirror past technology transitions where a few companies became dominant gatekeepers, potentially stifling innovation and competition in the European landscape.

As Brussels seeks to carve out a distinct identity in the global AI race, stakeholders must critically assess the implications of their current strategies and ensure that Europe's ambitions do not lead to further dependency on established American tech giants. The future of Europe's AI initiatives hinges on balancing investment with the cultivation of independent technological capabilities, a challenge that will require careful navigation and proactive policymaking.