Do Foreign Governments Need American Tech?

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0:34David Amiel:I'm Luke Vargas for The Wall Street Journal, and this is What's News Sunday, the show where we tackle the big questions about the biggest stories in the news by reaching out to our colleagues across the newsroom to help explain what's happening in our world. And this week, do foreign governments need American tech? Last month, France ordered government workers to stop using Teams, Zoom, Skype, GoToMeeting and WebEx, claiming that their proliferation had made France dependent on non-European actors, and instead government workers were to use a homegrown communication tool developed by the French state.

1:08David Amiel:The move is just the latest example of a growing tech sovereignty trend as countries seek to build their own digital technologies from communications platforms to AI systems, cloud networks, or even chips, and reduce their dependence on the U.S. private sector. Coming up, we'll speak to the man leading France's digital sovereignty push and talk to Journal Tech reporter Sam Schechner about what it could all mean for Silicon Valley. Let's get right to it.

1:36David Amiel:Well, the French state may be eager to cut the cord on Silicon Valley, but will digital sovereignty actually become more than a slogan? And what's at stake here for U.S. tech? Journal Tech reporter Sam Schechner joins me now. Sam, set the scene for us. What is digital sovereignty and why is everyone in Europe these days talking about it?

1:56Luke Vargas:Well, something does seem different in the air right now, certainly after the dust up that maybe isn't quite over around Greenland. And in general, since the arrival of President Trump, I think leaders in Europe have really started to question this transatlantic relationship, which, while at times tense, has always been friendly enough to say, when push comes to shove, we can rely on their tech. And now in recent weeks, you start to hear more seriously this conversation of like, well, what would we do if our tech was cut off, if we no longer had access to our email or to our cloud storage or to all of these things that American companies provide in Europe?

2:44Luke Vargas:I mean, is there actually any risk of that? Well, the thing that these countries are confronting is that it is a very, very big lift to separate from U.S. tech. The dependency is just so enormous, not just in Europe, but throughout the Western world, that we're talking a project of decades, not something that you can do over the course of a few months. And so an announcement like what France has done with new video conferencing software, or they have a kind of Google Docs replacement. I mean, those are achievable things, right, to get your government, you know, bureaucrats and other ministries working on a homegrown solution.

3:22Luke Vargas:And it's probably smart because if stuff did get cut off, you really don't want your government to be totally without any solutions. And if you look at the market share just for cloud services, cloud infrastructure in Europe, you know, big data centers, what you have is the top five American providers have something like 83 percent market share, according to IDC. That's something that's going to take a long time to shift.

3:47David Amiel:I mean, situate for us what we believe the vibe to be in Silicon Valley responding to all this.

3:53Luke Vargas:I mean, I think they take it super seriously. Europe represents for these big companies upwards of a quarter of their revenue. I mean, it's no joke. It would be a bloodbath if they were cut off somehow from Europe. And this has been the case for quite some time. So they take it very seriously. And that's why they invest so heavily in Europe, so much infrastructure, so much staff. Let's open an AI lab in Paris. Google's AI efforts are headquartered out of London. So in that sense, the dependency does go both ways.

4:21David Amiel:Sam, this tech decoupling is being led by governments like France to develop sovereign tech systems. But surely this also requires a strong private tech sector if there's any hope of rivaling the US.

4:33Luke Vargas:The government is not going to build a tech ecosystem, whether they're buying a video conferencing thing for government workers or not. We're talking about technologies that are being built in the private sector. And so that's the whole game, right? Can Europe build and sustain a vibrant tech ecosystem on its own? And for technologies that already exist, like cloud services, that's something that's been won by the U.S., but is still important for Europe to catch up in. They don't need new technologies. They just need heavy investment to try to build something that could match the cost of servers run by American companies.

5:09Luke Vargas:For the next tech revolution, there are very vibrant tech ecosystems here, and there's a lot of startups. And when it comes to AI, I mean, one of the most recognized labs is actually a French lab, Mistral. And Chinese labs have shown you don't necessarily need all the resources. There's definitely an open field that AI provides that may give Europe an ability to leapfrog into this tech race. And so I certainly wouldn't count Europe out of the tech race entirely.

5:39David Amiel:I've been speaking to Wall Street Journal tech reporter Sam Schechner. We've got to take a short break, but when we come back, we'll take a closer look at what digital sovereignty looks like for the man leading the charge in France. Stay with us.

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6:29David Amiel:Let's ditch the jargon and answer the question simply. What does sovereign tech really look like? Well, who better to ask than David Emiel, France's minister for state reform, who is on the line with us from Paris. David, define in your words how France and you see tech sovereignty. What does that mean?

6:48Sam Schechner:Well, France has been pushing for strategic autonomy at the European level for a long time. And in the world we live in, there is no strategic autonomy without tech sovereignty. It means three things. First, it means avoiding critical dependencies. And we need to strengthen our resilience in an unstable world on some specific parts of the tech sector. And second, we must ensure compliance with our values in order to preserve our democratic framework, in order to ensure consumer protection. The digital space is not the Wild West, as President Emmanuel Macron often says. We must protect the health of our children.

7:34Sam Schechner:We must keep on fighting against racism, hate speeches, anti-Semitism in social networks. and that is in line with European regulation. And third, we must support European innovation, particularly, for instance, in cloud computing, in artificial intelligence, in data management, because this would be the key pillars of competitiveness in the future.

8:01David Amiel:Just in terms of critical dependency and steps to reduce it, tell me about the push to shift government workers away from U.S. video conferencing platforms and how that fits into the wider strategy?

8:13Sam Schechner:So we need to rely on solutions we can master so we avoid service interruptions. So in a way to ensure our resilience, we put forward a solution that was designed both by research and development made by the French state, but also by French private companies. That's called Visio. and it incorporates the state-of-the-art video conferencing. And that's very important because if you don't provide public agents with state-of-the-art solutions, there will be no adoption. And history is full of state-led projects that led to nowhere because of that. So it's very important for us to really rely on the strength and innovation of the private sector.

9:03Sam Schechner:So our solution will be hosted by Outscale. It comes from a Desso system. There will be AI-powered meeting transcription using speaker separation technologies that is provided by Pianote, a French startup. And that will also do a lot to facilitate the daily workings of French public agents.

9:27David Amiel:So what's next here? Is the French government going to back more tools? And are you going to try and convince the private sector to adopt this software?

9:35Sam Schechner:Well, you know, when you don't master a solution, you cannot ensure that it will be resilient in any state of the world because there can be many, many crises in the years to come. We have witnessed some in the recent years. Think of COVID, think of the war in Ukraine and so on. More specifically, it's really an issue of resilience on some things that are really related to the core functioning of the state.

10:08David Amiel:I see that you wrote last year that in responding to President Trump's economic policies, confrontation in the digital field may be inevitable. You also said that Europe was becoming less frightened of wielding power when it comes to taking its technological future into its hands. But how much less frightened? Specifically, what if the steps you're taking get the attention of the White House and provoke U.S. anger?

10:34Sam Schechner:You know, the sovereignty agenda, the strategic autonomy that we've been pushing is not new. France has been calling for a long time for more strategic autonomy of Europe. It has really been at the heart of what President Macron has been pushing for since his first election in 2017. And it was true also under other American administrations. I believe that in an unstable world, it's very important that Europe assert itself as a geopolitical power. And that is, I believe, good for everyone. And it's good for the U.S., but it's good for the world economy as well, because the more Europe is an engine for world growth, the more I think it will benefit everybody.

11:29David Amiel:I mean, this is still early days, but I'm curious what you've learned about that effort so far, what it's going to take for France if it wants to rival U.S. tech competition and cultivate its domestic industry.

11:40Sam Schechner:Well, I believe also that we have to learn what works behind Europe and especially in the US. When you look at what the US has been really good at, there is no doubt that innovation is at the core of it. And when you look at the way the US has engineered public and private partnerships, the key role that has been played in the U.S. by major universities and research centers. That's also something that Europe, at the European level, because it's a relevant scale to act, I believe, on this innovation agenda, has to learn from.

12:24David Amiel:The U.S. president has also been very forceful in basically going out there and soliciting orders, for example, for Boeing planes as a part of trade deals around the world. Are we learning that that's kind of something that's necessary here? You've got to basically help your companies compete at the head of state level?

12:41Sam Schechner:No, as you know, we don't believe in protectionism. I think that innovation also flourishes on trade, on exchange of ideas and so on. And that is really something that at the heart also of the European economy to provide for this stable, open, predictive framework. And when you look at the comparative advantage of the European and of the French economy, I believe that's part of it.

13:18David Amiel:Finally, when you look across the French tech landscape, startups and slightly larger businesses that already exist, do you think already there is a company out there that will grow and become a global competitor to some of the big U.S. firms that we've talked about earlier? Or is that missing the point?

13:35Sam Schechner:Definitely, I believe that Europeans should aim at creating European champions in tech. France is now the most attractive country in Europe for foreign investment. So the next frontier is really scaling up through supporting innovation, easing access to capital, streamlining certain regulations, and so on.

14:00David Amiel:David Amiel is France's minister for state reform. Minister, thank you so much for being with us on What's News. Thank you very much. And that's it for What's News for February 22nd. Today's show was produced by Daniel Bach and Hattie Moyer, with supervising producers Sondra Kilhoff and Melanie Roy. I'm Luke Vargas, and we'll be back tomorrow morning with a brand new show. Until then, thanks for listening.

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