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Digital sovereignty is now emerging as one of Europe’s key strategic challenges. Long viewed as primarily a technological issue, it now has a direct impact on industrial competitiveness, economic security and the resilience of our societies.

The figures speak for themselves. According to the European Commission, around 80 per cent of the digital technologies used in Europe originate from countries outside the European Union, mainly the United States. Three US ‘hyperscalers’ alone account for nearly 65 per cent of the European cloud market, whilst the United States accounts for around 75 per cent of global computing capacity dedicated to artificial intelligence, compared with just 5 per cent for the European Union.

Against a backdrop of geopolitical tensions, the rise of cyber threats and the explosion in demand for cloud computing and artificial intelligence, this dependence is giving rise to growing concerns. The issues of business continuity, the protection of sensitive data and control over critical infrastructure are becoming central.

However, digital sovereignty must not be confused with a policy of technological self-sufficiency or economic isolation. Seeking to ‘do everything in Europe’ would be unrealistic in an environment where digital value chains are deeply globalised. Cloud infrastructure, semiconductors, software and artificial intelligence technologies are now based on complex interdependencies.

FEDIL therefore advocates a pragmatic and balanced approach. The aim is not to cut Europe off from foreign technologies, but to better manage critical dependencies and reduce strategic vulnerabilities where they are most sensitive.

Not all digital activities present the same level of risk. It is therefore legitimate to impose high standards of sovereignty for critical sectors such as defence, healthcare, essential infrastructure and public administrations. Conversely, for less sensitive or non-sensitive applications, an open and competitive approach must be maintained in order to guarantee access to the best available technologies and to support innovation.

This vision is fully in line with the European Union’s recent policy directions: on 3 June, the European Commission presented its package on technological sovereignty, one of the key initiatives of which is the Cloud & AI Development Act. This aims to strengthen Europe’s capabilities in cloud computing and artificial intelligence, to develop secure digital infrastructure for critical applications, and to better protect the most sensitive data. This package reflects Europe’s growing determination to reduce its strategic dependencies whilst maintaining its economic and technological openness.

In this context, Luxembourg possesses significant strengths that enable it to play a key role in this European drive. Over the years, Luxembourg has developed a high-performance digital infrastructure based on first-class international connectivity, modern data centres, high-performance computing (HPC) capabilities and a recognised cloud ecosystem.

These strengths have, moreover, recently been confirmed by the European Commission. In its 2026 report on the Digital Decade, published on 17 June, Luxembourg is listed among the most advanced countries in the European Union in the digital sphere. In particular, the Commission highlights the country’s excellent performance in the areas of connectivity, artificial intelligence and digital public services.

Luxembourg can also draw on the emergence of sovereign cloud offerings and the growing recognition of Luxembourg-based players in strategic European projects. This momentum confirms the country’s potential to position itself as a trusted platform at the heart of the European digital ecosystem.

However, to transform this potential into a sustainable advantage, several conditions will need to be met. It will be necessary to continue supporting investment in strategic digital infrastructure, to speed up and simplify administrative procedures, to proactively identify suitable sites for the deployment of this infrastructure, and to ensure access to competitive, low-carbon energy in sufficient quantities.

However, these investments will only bear full fruit if Luxembourg and Europe possess the necessary skills to design, develop and operate them. Digital sovereignty is not built solely through regulation, infrastructure or mechanisms of European preference; it relies just as much on talent, excellence and the capacity for innovation.

Europe will only be able to strengthen its sovereignty in the long term by developing cutting-edge technologies capable of competing on global markets, by supporting research and technological entrepreneurship, and by attracting the best talent. True sovereignty does not mean shielding ourselves from competition, but rather strengthening our capacity to innovate and remain competitive so that we can continue to be key players in global value chains.