What If the US Cuts Off Tech to Europe?
Europe’s Tech Crisis: A 2027 Scenario
Two days ago WSJ published an article: Europe Prepares for a Nightmare Scenario: The U.S. Blocking Access to Tech. Let us imagine a world where the US/EU relations escalate to a point where Trump decides that it is time to pull the plug.
As the AI boom started in 2022 with the release of ChatGPT, all major US tech companies jumped into the AI race, building infrastructure, creating their own chips, collecting data, and training models. China was not sleeping either. They took over open-weight models and completely dominate this space.
They push US tech forward. Every time China releases an amazing, cheap, open-weight model like DeepSeek R1, Kimi K2, or MiniMax M2, US tech needs to reconsider its products, push them to a new level, and make them cheaper. As published in Beyond DeepSeek: China’s Diverse Open-Weight AI Ecosystem and Its Policy Implications., the Chinese government positions their AI strategy as a contrast to closed AI of the US. And politics and interior motives aside, what a great contribution they make to the AI research community:
More than a dozen Chinese organizations have developed and continue to develop and release powerful AI models openly.
Thanks to this closed, for-profit AI versus open, for-influence AI rivalry, what we ended up with is spectacular. Amazon and Google both have their own chips: Trainium and TPU. All three major cloud providers offer comprehensive AI services: Bedrock, AI Foundry, and Vertex AI. China was not lagging behind either. They are actively reducing their dependency on Nvidia by creating Huawei chips and released state-of-the-art multimodal models. MiniMax M2.1 is probably one of the best agentic models out there, and the text-to-speech and music models by MiniMax are, in my opinion, the best on the market. And I am not even talking about GLM, DeepSeek, or Kimi. China also dominates AI research. Top conferences are filled with AI researchers, and many innovations come from there, for example DeepSeek in the latest NeurIPs paper showed that is reasoning LLMs can be developed purely through reinforcement learning rather than human annotations. It would hugely reduce the moat of creating LLMs as no massive human annotations are needed.
And what about Europe. What has Europe done in these 3 years?
The greatest European contribution towards AI is a massive rule book written by people who do not seem to understand AI.
Europe did not create its own competitive chips. There are initiatives like the European Processor Initiative or startups such as Axelera AI, but none of them come even close to competing with NVIDIA, or with what the US and China have built in terms of large-scale AI training hardware.
Europe also did not produce a competitive AI model, unless you consider Mistral one. And if you do, please cancel your Gemini or ChatGPT subscription and switch to LeChat.
Instead of focusing on fundamental problems like the energy resources required for data centers, the lack of expertise needed to build competitive AI because the most capable people prefer American salaries, or the horrendous bureaucracy and taxes that suffocate small and medium businesses and tech startups, Europe chose to climb onto the moral high horse. It pretends to be too ethical for all this AI stuff, while in reality there is simply not enough money, energy, or talent to compete, and fundamental changes are required to turn this situation around.
Electricity powers the chips and data centers needed to run AI models, and it costs up to three times US levels in Europe.
And now, oopsie-woopsie, it looks like there is a nightmare scenario that is becoming increasingly likely.
One year ago, I was on an AI panel at the Data Festival in Munich, and I was asked about my opinion on the EU AI Act. While everyone was applauding Europe for standing on high moral ground and welcoming regulation, I said:
“If you can’t innovate, you regulate.”
The EU is regulating European AI that is not even there. What exactly are they regulating? Mistral?
A much more interesting question would be not what obscure AI risks from non-existent systems might arise, but what happens if Trump decides to cut off the tech.
What will Europe have to counteract?
What if one day Trump puts tariffs on Azure Cloud, AWS, and Google Cloud services? What will the EU answer? Remove his LeChat subscription?
The US showed already what it could do as it put sanctions on the ICC Hague court prosecutor in the case of Israel/Gaza war who lost email access and access to his bank accounts.
Losing access to American cloud services would essentially paralyze the German economy and industry. Every single major corporation relies on those services:
Circa 70 percent of the cloud capacities available in Europe are currently controlled by US providers. 85 percent of the graphics processing units (GPUs) required for artificial intelligence (AI) are also controlled by US providers. The hyperscalers Amazon Web Services (AWS), Microsoft and Google operate more infrastructure in these fields in Germany than all European providers combined.
A story about the future: EU without American Clouds
So let us play a science fiction scenario where the US tech is not accessible to EU anymore and see what collapses.
Behind the paywall is the 2027 EU tech collapse scenario in text, supplemented with an audio debate and a video summary that you can listen to in your car or on the way to work. Here is the intro:
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