I think rather, that it is the EU who cannot live without US cloud services and AI-services. Imagine if the US, behind closed doors of course, threatened to cut off all cloud services. Huge parts of the public and private sector could collapse.
This already happened. The US government cut off a judge at the international criminal court from her Office365 account because she was pressing a war crimes case against Benjamin Netanyahu.<p>It's the reason why in the last year you've seen multiple European governments very quickly build an escape hatch against US tech.<p>We all expect that you'll use our dependency on US services as a weapon, you've already done so, so we're phasing you out. It'll take decades to repair the lost trust in US digital services among the governments of Europe.
This is not a flip the switch tomorrow hypothetical. The fallout of such an action would be huge for everyone, including the US stock market.<p>Here in Europe, every government and major corporation have recently added their dependance on US platforms to their risk management taxonomy. For the (unlikely) scenario you mention, for the scenario that their company/government somehow runs afoul of the US goverment and this is used as leverage, for espionage reasons, and for other reasons that may have already been in their risk overview (data privacy, compliance, etc) but were seen as manageable but are no longer so.<p>For some anecdotes: My former employer just moved off of AWS to a EU provider and will likely also move away from Google Cloud for their internal needs, my current employer has started evaluating moving off of Azure at the request of our clients (though they dismissed the idea of moving off of Office 365 internally), and my partner's company (a large corporate) has started prioritizing a transition plan away from AWS.
> In the cases provided for by the law and with provisions for compensation,
private property may be expropriated for reasons of general interest.<p>Excerpt from article 42 of the Italian constitution. This would cover, for instance, the entire eu-south-1 availability zone in AWS. I'm sure that other member states have their own provisions and you need to keep in mind that Google/Amazon/Microsoft employees in the relevant countries would predictably comply with local authorities, not obey a foreign power trying to collapse their governments.<p>If your power comes from saying "I own that", it's crucial not to enter complete hostility with nations, the only entities who can reply, "Says who?".
EU can live fine without US cloud services, and it's not very dependent on AI at the moment. If access would be cut off, companies would just switch to other solutions, which BTW are already there. The question is more how much time they would have to switch and adapt. An unannounced zero-day cut off would be of course harmful for a while (days, weeks, maybe months), but on most parts could be probably solved in a short timeframe for the important parts.<p>Also, EU (and probably most parts of the world) are already switching away at this moment already.
If they did that, their pension system (in huge parts built on stock) would collapse. The American tech market is largely saturated, and needs room to grow. The EU is a market of almost 500 million people with a lot of money. The US simply <i>cannot</i> ignore it.
Yes, think about that and how the shares would drop in an instant.<p>Good thing european governments and industries start to work on real technological and financial independence. It is high time for cutting ties with a country that is acting as irrational and self centered as the usa.
> Huge parts of the public and private sector could collapse.<p>Today, yes.<p>The possibility of this, combined with how seriously Greenland was taken, means the EU is collectively saying "as a matter of urgency, we need strategic independence from the US".<p>This will take a while. Ironically, access to AI will make the transition much faster.<p>However, this is currently mutual interdependence: if the US actually cut off non-AI cloud to the EU, the US would screw over one of their major suppliers <i>thus preventing them from supplying stuff</i>, and leave itself entirely at the mercy of China. If it cut off AI to the EU, there goes a big market for tokens and the current data centre supply looks even more sketchy than its effect on electricity prices has already made it look. (But one bit of good news is that US electricity prices would come down).
You can do that, once, if you want to trigger an avalanche of realignment away from the U.S.<p>Not only would you lose the 450 million odd EU customers, but the rest of the world will reconsider doing business with you as well.
> Huge parts of the public and private sector could collapse.<p>temporarily yes, then EU will be able to build them on its own.<p>But what would also collapse is trust in all US companies, whole world will start working on their own solutions, no more AWS/GCP/Azure hegemony in the world. Everyone would close their internet, just like China did and develop own solutions
We would build our own alternatives. Russia is a much smaller market (120 million people) and they have their own tech companies.
> We would build our own alternatives.<p>Right, and we haven’t because we just don’t wanna? The gap between US/China and the EU in AI is becoming wider by the day.<p>Russia has like 3-4 large tech companies (Sber, Yandex, VK, and maybe Ozon). And they completely rely on foreign hardware. I don’t even want to imagine how could Russia start building frontier AI in these circumstances.
> Right, and we haven’t because we just don’t wanna? The gap between US/China and the EU in AI is becoming wider by the day.<p>We've repeatedly built things, they often get bought by US companies. This doesn't necessarily even involve them moving office, as for example Deep Mind was founded in the UK (while it was in the EU) and is still there (HQ: London; research offices in France & Germany so still in EU too) despite now being owned by Alphabet.
> Right, and we haven’t because we just don’t wanna?<p>The EU hasn't because European investors are shy about deploying capital. If you look at European weapons and aerospace, it's clear there's no particular technical or capability barrier.
We hadn't because we didn't have to.
It's actually pretty sad for the EU that the biggest tech company names on the continent are all Russian.
Not that "largest by market cap" says much, given that it corresponds to "oh look a monopoly" as much as it does "innovation and real growth" (and also "bubble"), but you're wrong.<p>Market caps of Russian examples from above:<p>Sber: $84 bn - <a href="https://companiesmarketcap.com/sberbank/marketcap/" rel="nofollow">https://companiesmarketcap.com/sberbank/marketcap/</a><p>Yandex: RUB 1327B (~= $17 bn) - <a href="https://tradingeconomics.com/yndx:rm:market-capitalization" rel="nofollow">https://tradingeconomics.com/yndx:rm:market-capitalization</a><p>VK: RUB 176.7B (~= $2.3 bn) - <a href="https://smart-lab.ru/q/VKCO/MSFO/market_cap/en/" rel="nofollow">https://smart-lab.ru/q/VKCO/MSFO/market_cap/en/</a><p>Ozon: $8.9 bn - <a href="https://companiesmarketcap.com/ozon/marketcap/" rel="nofollow">https://companiesmarketcap.com/ozon/marketcap/</a><p>Market caps of bigger EU tech firms:<p><pre><code> ASML: $533.84 B
Siemens: $223.14 B
SAP: $202.96 B
Seagate Technology: $164.43 B
</code></pre>
- from the following slightly out of date list: <a href="https://businesschief.eu/technology/top-10-technology-companies-in-europe" rel="nofollow">https://businesschief.eu/technology/top-10-technology-compan...</a>
ASML, SAP, ARM, Spotify, ...<p>How do you define biggest? Can't be by market cap.
Don’t believe everything you read in Pravda.
It's a culture thing. There are even smaller markets like Taiwan that developed industries EU didn't.
Western EU countries are very risk averse, anti-business and has too conservative hierarchy to develop this kind of culture. You can see it as early as in school system where the focus is on rising the floor while forgetting about the ceiling.
<i>> Imagine if the US, behind closed doors of course, threatened to cut off all cloud services</i><p>That would be the single best thing that could happen to the EU.<p>I think people would be surprised by how quickly European and international companies and governments can rid themselves of the American tech stack. They use this stuff because it's convenient, solid, and cheap, not because it's the only option.<p><i>> Huge parts of the public and private sector could collapse.</i><p>Yes, both in the EU and the US, initially. It would also force the EU to finally invest in its own tech stack and end the US's ability to sell software globally.<p>People seem to believe that America's global economic dominance is a law of nature that will never change, regardless of what the US does. But it's not. There is no American exceptionalism, other than what America worked for.<p>If you continually kick your customers in the face, they'll eventually stop being your customers.
And achieve what exactly? EU being dependent on US cloud services also mean EU being a big part of their revenue. Parts of EU public and private sector may collapse but they will also switch to their own alternatives, the broken trust and lost revenue on the other hand will definitely not be recovered by US companies.
It would hurt the EU more than it would hurt us and they're in denial about it.
Let's say you are right on this. What's the point of hurting yourself? There would be no meaningful benefit.
> It would hurt the EU more than it would hurt us<p>So what? It will hurt everyone, but end result will be that US companies won't be able to sell in other parts of the world, because everyone will have own standards, own solutions, new regulations will come up about data residency, which will require using unknown AWS alternative in a small country and even if you are willing to maintain 150 Datacenter across different countries, companies will be afraid of using US tech, to one day lose access to their data
It would hurt, for a while. Then people would wake up and slowly better solutions would appear. Not unlike post-Trump NATO. But the US would have lost its leader position and a large market.<p>I think the EU needs a kick under the ass to stop its comfortable inertia.
Humanity has lived for thousands of years without cloud and AI services. We can definitely live without those. In fact, considering the damage that is being done to the environment (and thus ourselves) in name of those services, we’d very likely be better off without them in the first place.<p>A large reason US services have such a presence in Europe is that their flagrant disregard for rules and the pursuit of profit at all costs gives them an unfair advantage. If those US companies cut off their services, in the long run the ones in the EU would have the room to expand within the rules. That’s the opposite of the doomsday scenario you’re describing. Though of course an abrupt cut would be momentarily disruptive, countries in the EU are already taking steps to reduce reliance on US services (for example: LaSuite).
The EU would counter that threat with the anti-coercion instrument. Shut Trump up really fast when he was last talking about annexing Greenland.
> Imagine if the US, behind closed doors of course, threatened to cut off all cloud services. Huge parts of the public and private sector could collapse.<p>I think the EU member states would declare it a matter of national emergency and nationalize the relevant assets, with every other country these American companies sell to taking notes and considering doing the same pre-emptively, providing a huge investment boost to EU tech companies (and almost certainly China) while tanking the US economy, and poisoning the ability of the Americans to sell to Europe for the next hundred years.<p>You don't win the opium wars by threatening to cut off the supply of opium.