Europe prepares for a nightmare scenario: The US blocking access to tech

President Trump this week dropped his threat to take control of Greenland by force if necessary. But even the possibility of armed conflict with allies has injected new urgency into long-simmering debates in Europe about how to reduce its reliance on U.S. tech infrastructure and tools that support swaths of the economy.

The worst-case scenario for European officials? A White House executive order that cuts off the region’s access to data centers or email software that businesses and governments need to function.

“When you start having these kinds of thoughts, even if they’re just thoughts, you have to start thinking: How would that work?" asked Bernard Liautaud, managing partner of Balderton Capital, a European venture-capital firm. “Can you imagine Europe functioning without American technology? It’s very hard to imagine."

Trump’s approach to Greenland has pushed European officials and diplomats to toughen their views on the need for Europe to curb its dependence on the U.S., from tech to defense to trade.

The European Parliament on Thursday passed a “technological sovereignty" resolution that supports using public procurement criteria to favor European products where possible and proposes new legislation to promote European cloud providers.

The European Union’s executive arm is currently working on new legislation aimed at promoting tech sovereignty, according to officials familiar with the matter. Security risks posed by American technology have been openly discussed as part of that work, one of the officials said, adding that such talk would have been unthinkable just six months ago.

Officials and lawmakers said the bloc’s focus on tech sovereignty is about curbing dependencies and boosting European companies, not an attempt to ditch American tech entirely.

A potential “decoupling" of Europe and U.S. tech was a hot topic of discussion among business leaders and policymakers at the World Economic Forum in Davos, Switzerland, this week. Many said it would be a complex undertaking given the breadth of American tech used, from chips and cloud services to AI models and other software.

The scale of Europe’s dependence on U.S. tech has never been so large, particularly for cloud-computing services from companies including Amazon.com, Google and Microsoft. In 2024, European customers spent nearly $25 billion on infrastructure services from the top five U.S. cloud companies, or 83% of the total market in Europe, according to research firm IDC.

“Big European companies should use European software," Nicolas Dufourcq, head of French state-owned investment bank Bpifrance, said in a television interview Thursday. “Choosing American digital technology by default is too easy and must stop."

While Europe helped lead the mobile-phone revolution with companies including Nokia and Ericsson, the continent has lagged behind the U.S. and China in the internet age—failing to produce tech giants on the same scale. Over the years, European governments helped finance or promote multiple homegrown search engines but found little traction to rival Google.

Many European entrepreneurs blame Europe’s plight on a risk-averse culture, fragmented market and onerous regulations. That is in large part why the EU is now trying to relax some of its digital rules, though progress has so far been slow.

European efforts to escape U.S. tech dominance for privacy or commercial reasons have been a recurring theme for decades.

The issue heated up in 2013, after former U.S. National Security Agency contractor Edward Snowden leaked information about U.S. surveillance practices—purportedly including data at U.S. tech giants. The episode was cited when the EU’s top court struck down a trans-Atlantic data-sharing deal.

In 2018, under the first Trump administration, European companies and policymakers again expressed concern after the U.S. passed a law that explicitly granted law enforcement the authority to request data that American cloud providers have stored overseas.

In both cases, U.S. companies managed to keep and even increase their European market share by building more data centers to house clients’ data on European soil and pledging not to send it elsewhere. In recent years, the tech companies have gone further, adding options to store data with subsidiaries or partners under European control—something European executives in Davos said they are seeking.

Since Trump’s re-election, European officials have asked some American cloud providers to ensure that their customers in key sectors, such as energy, can easily move their data-center infrastructure to local providers if a U.S. action interrupts their service, people familiar with the matter said.

In Germany, Microsoft recently expanded a deal with Delos Cloud—a subsidiary of SAP—to deliver the U.S. company’s services under its own ownership and control.

Microsoft over the past year has restructured corporate subsidiaries, installed boards filled only with Europeans and taken other steps to establish outposts in the region that can meet customer demands for more localized cloud and AI services, the people added.

Amazon last week launched a “sovereign cloud" service in Europe, which is run by EU citizens and based in Germany.

Google has in recent years also created partnerships with local companies in several European countries for its sovereign cloud service, including a joint venture in France that is fully operated by a local business—insulating clients from potential American requests to limit access or snoop.

But governments haven’t so far asked for completely domestic setups because they still want to benefit from the technology and scale of working with an array of partners, said Matt Brittin, who until last year ran Google’s operations in Europe, the Middle East and Africa. “What they’re really looking for is a degree of control and safety and security," he said.

The stakes are high for American tech companies. They exported more than $360 billion in so-called digitally deliverable services—including advertising and artificial-intelligence tools—to Europe in 2024, according to U.S. government data.

Google parent Alphabet, for example, generated 29% of its nearly $30 billion in third-quarter revenue from Europe, the Middle East and Africa.

U.S. tech giants have also invested significantly in Europe, opening major offices, building infrastructure, acquiring businesses and operating research labs.

France and Germany have been particularly vocal about the need to foster tech independence since the new Trump administration began warning European leaders to fall in line behind the U.S. Germany’s digital ministry says it is testing an open-source alternative to Microsoft workplace and collaboration tools, called openDesk, both on workstations within the ministry and at some German federal agencies.

In November, German Chancellor Friedrich Merz hosted a digital-sovereignty summit with France to push for loosening EU tech rules, European preference in tech purchases, and new investments in data centers.

French President Emmanuel Macron has made promoting local companies and loosening EU regulations a core tenet of his second term. He has tried to help Mistral AI—one of Europe’s only leading artificial-intelligence developers—secure big corporate customers. He has also sought to attract tens of billions of dollars in AI data centers to France, touting cheap electricity from nuclear power.

“Our willingness is clearly to do everything we can to build European champions, " Macron said at the German digital-sovereignty summit. “This is just a refusal of being a vassal."

Write to Sam Schechner at Sam.Schechner@wsj.com, Berber Jin at berber.jin@wsj.com and Kim Mackrael at kim.mackrael@wsj.com