European lenders fear US cloud providers could cut off services to the economic bloc due to heightened geopolitical tensions, and stressed the need for greater tech sovereignty.
Referencing its use of Google cloud services, Christoffer Malmer, chief financial officer at Sweden’s largest bank, SEB, asked “What happens if we can’t get supplies out of the US for geopolitical reasons?” He was speaking on a panel about strategic technologies and the race for competitiveness at the Institute of International Finance’s European Summit on Thursday in Brussels.
Malmer asked fellow panellist Mark Rydquist, managing director for financial services, Emea at Google Cloud, whether it would stop providing services into Europe due to political reasons.
“Technology owned by US companies doesn’t prohibit companies’ ability to access technology,” said Rydquist, adding that the real question for Europe’s financial institutions is whether they are re-engineering their businesses quickly enough to win the race to build the most compelling, “digital-first” experience.
Speaking on the same panel on Thursday, Maurizio Poletto, chief operating officer and chief platform officer at Erste Group, said he had been asked by the bank’s stakeholders about “cloud sovereignty”.
“If you asked me whether a global company would stop serving Europe, I would have said no. But it is more realistic today,” he said.
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According to the American Society for Engineering Education, over half of the enterprise cloud infrastructure in the EU is provided by US “hyperscalers”, with Amazon Web Services holding a 31 per cent market share, Microsoft Azure 23 per cent, and Google Cloud 11 per cent.
In an effort to shore up greater tech sovereignty from US companies, Malmer said SEB, alongside AstraZeneca and Saab, is building a sovereign computer capability using Nvidia chips. Saab announced it had joined the consortium, which also includes Ericsson and Wallenberg Investments, last May.
The consortium’s next-generation “AI compute infrastructure” will unlock new possibilities for AI adoption, and secure access for SEB to “critical infrastructure”, said the bank’s chief operating officer, Jonas Ahlström, at the time it joined the initiative.
However, speaking on Thursday’s panel, Rydquist maintained that US “hyperscalers” like Google Cloud are the “most viable option for building a competitive offering”, as they had invested trillions in the infrastructure to power AI data centres. Relative to the US and China, he said the cost of power in Europe will prohibit its ability to lead.
SEB has also joined forces with other European banks in launching a euro denominated stablecoin, which Malmer said should be in circulation next year. The stablecoin is designed to challenge the dominance of US dollar stablecoins like USDC. “We need to start acting on this [sovereignty]. We don’t have a choice. I would love for European supplies of these products,” said Malmer.
While praising SEB’s sovereign initiatives, Poletto said he feared greater tech sovereignty in Europe would lead to more fragmentation, which is “killing us”.
“I’m afraid we are going to have the same [sovereign initiatives] in Romania, Spain, Italy and Poland. We operate in seven countries in Europe. We have to be careful. Europe is too fragmented.”