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European technological sovereignty still runs on American chips

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European technological sovereignty still runs on American chips

Anyone watching innovation in Europe knows it: every great declaration of independence carries with it a small confession of dependence. This week was no exception. On Saturday the German company Aleph Alpha launched Kolibri, an artificial intelligence model designed for public administrations and regulated industries. On Tuesday the French company Mistral presented Mistral Large 4, nicknamed “Le Chonk”, with roughly one trillion parameters. Both are sold as models built, trained and controlled in Europe. But European technological sovereignty is still more of a goal than a fact, and not only when it comes to artificial intelligence.

The Federal Reserve raised rates with a unanimous vote, and 16 of its 18 decision-makers expect another increase by the end of the year.

European technological sovereignty still runs on American chips

Mistral’s claims are bold. The company says the model beats GPT-6-Astra on a visual benchmark. It solved 93% of the Cybench hacking exercises. American rivals scored nearly zero on that test, mostly because they refused parts of the tasks. The number should be read with caution: it says as much about safety policies as about capabilities. What remains is the message from chief executive Arthur Mensch: the idea that Europe cannot compete is not true. And the money is there: a 21 billion euro valuation after a 3 billion euro round in September.

Kolibri takes a different path. According to europeanbusinessmagazine.com, it is a smaller model, with 78 billion parameters and only 3 billion active at any one time, cheap to run on one’s own servers. Almost a quarter of its training data is in German and the model is trained to admit when it does not know. The real selling point is compliance. The data was screened against a list of more than 4.5 million banned websites. A technical report on copyright and the AI Act has been published. For a German ministry, that audit trail is worth more than any benchmark.

Yet there is an uncomfortable detail. Last month Aleph Alpha signed a definitive agreement to merge with the Canadian company Cohere. The combined company will be based in both Canada and Germany. Above all, both models depend on American chips: Le Chonk was trained on 3,800 Nvidia Grace Blackwell units. European technological sovereignty today means European data centers and laws, not European silicon. As American manufacturers set the price and supply of computing power, independence has a ceiling.

The clean dollar and the energy bill

That same imbalance shows up in the markets. The euro is trading below 1.12 dollars, close to the 17-month low hit on Monday after tensions over the French budget. Traders have a phrase to explain it: the dollar is “the cleanest shirt in the laundry”. The United States has heavy federal debts and inflation above target for more than five years, yet still seem the safest place. The Federal Reserve raised rates with a unanimous vote, and 16 of its 18 decision-makers expect another increase by the end of the year. The European Central Bank cannot do the same without risking a recession, and indebted France makes its position even harder.

There is also a new competitor for public money: artificial intelligence. According to europeanbusinessmagazine.com, SpaceX, Oracle and Broadcom are raising capital to buy chips, and Anthropic is aiming to go public in a deal worth up to 100 billion dollars, the largest in history. Yields on American ten-year and thirty-year Treasuries are near 24-year highs. Europe pays the bill without having American growth to offset it. On the energy front the picture is just as contradictory. In Spain, the company Moeve is building in Huelva the first large green hydrogen plant in southern Europe. It will have 300 megawatts of electrolyzers and 45,000 tonnes a year. It is backed by 304 million euros in public funding. Yet that project covers just 2.5% of the 12 gigawatts promised by 2030.

The Spanish paradox is instructive for anyone with a pro-European business plan. According to europeanbusinessmagazine.com, the best conditions, the cheapest sunshine, an industry association counting roughly 400 projects worth over 33 billion euros. But of the 145 commercial projects, only a few have reached a final investment decision. Customers with long contracts are missing, and so are the pipelines. The H2Med corridor, with the BarMar undersea link to Marseille, will not operate before 2032. The lesson applies to Mistral and Aleph Alpha’s models as much as to hydrogen: building supply without a demand that signs is risky. European governments should give real contracts to sovereign models, because that is how the money follows.

When the system goes down, who pays?

The fragility of infrastructure can be felt first-hand. In April 2025 the blackout in Spain and Portugal left about 55 million people without digital payments. Supermarkets turned away customers without cash. Eighty months later, Mastercard responded. From February 2027 every new card issued in Europe will be able to pay offline, up to 200 euros per transaction. From May 2027 every new terminal will have to support it. The system is already being tested in Denmark, Sweden, Estonia and Latvia, where during a storm payments continued thanks to local generators. But about two thirds of card payments in the eurozone go through international companies, mainly Mastercard and Visa according to the ECB. Europe’s resilience depends on decisions made in New York, and this strengthens the case for the digital euro with an offline function.

The same risks emerge from fintech. Wise, built on transparency toward banks, issued incorrect tax statements for four years, from 2021 to 2025. The cause was a software error by a third-party vendor. It is now discussing a collective settlement with HM Revenue & Customs for British customers who paid too much tax. It chose to pay the bill itself rather than send them to the small print. The lesson is clear for anyone building financial products: apparent simplicity hides regulatory complexity, and anyone offering savings must be judged like a bank.

What remains to be decided

Europe has shown it can build state-of-the-art models, has funded hydrogen plants, payments that survive a blackout. The three things sovereignty requires are models, money and chips: it has the first, is getting the second, and does not have the third. In the meantime the euro should slide toward 1.10 dollars. The Spanish elections on 29 November could slow down the hydrogen project. The ECB keeps calling for its own payment systems. For Italian founders and investors the question is not whether Europe can compete, but who will sign the contracts that turn capabilities into industries.

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