Nvidia's “Sovereign” AI could win a sarcasm award

(Bloomberg's opinion) – Nvidia Corp.'s billionaire boss Jensen Huang is surrounded by European capitals dressed in his signature leather jacket and shares the stage with things like Keir Starmer and Emmanuel Macron. But if there is a sarcastic prize, it's a concept that might win some.

Huang's pitch, naturally, hit a chord with a new source of productivity gains and a leader desperate to find a way to avoid falling into the final stages of US-China-controlled high-tech races. The recent announcement includes a partnership with French AI startup Mistral, which includes a German-based industrial cloud for European manufacturing, built a cloud platform with 18,000 Nvidia Blackwell chips and built with 10,000 Blackwell chips. It's not just Europe – Nvidia cut large sovereign AI trades in the Middle East – but the Paleontane has seen Huang increase in computing capacity by ten times over the next two years. “It's coming,” he said.

But this doesn't seem like sovereignty. From Nvidia's perspective, the company certainly stands as a geopolitical actor, and is directly involved with heads of state like Macron as the ultimate technology enabler to promote AI adoption. This is good for Nvidia amid the broader Chinese trade war, as Europeans lose $15 billion in China sales due to export controls and become US technology providers like Alphabet Inc. and Microsoft Corp. Bloomberg Intelligence, among the broader Chinese trade war, as Sovereign Ai Investments, estimated last month, saw Nvidia's Ancry Angly for nvidia add between $1.5 billion to $15 billion annually.

But from a European perspective, we still have a long way to go as technology autonomous leaders like Macron want to provide uneasy voters. These large AI projects powered hardware and infrastructure are ultimately Nvidia's, a US company with an 80% market share, and its advantages entrenched through chips that are updated or replaced every few years. As long as there is a European supply chain, it exists elsewhere in the brain engineers and open source models offered by Mistral and others. However, it remains to be seen whether it will be sufficient to secure the future of European AI when US rivals are very dominant. Mistral's billion euros ($1.2 billion) of capital raised so far is only a small portion compared to Openai's. And, according to Epoch AI, which is as ambitious as its plan, Europe today has only 4.8% of its estimated global AI calculation power.

I've seen this movie before. France and Germany once locked their wishes into the sovereign cloud to protect user data from areas outside the territory of the US and China. Today, US tech companies still make up about 70% of European cloud services. And there are opposition, like the German cloud deal with Google, including the Danish municipalities that have left Microsoft. In search, European tools advertised as Google's alternative rely on Microsoft's Bing instead. So when Bing fell during the global halt last year, they did so too. Isn't it surprising that Microsoft is offering “sovereign cloud” services to Europe without hints of irony?

Aside from misnomers and fuzzy languages, some will argue that this is not a big deal. When I applied last week's research and AI summit, I relaxed the panel comparing AI sovereignty with national airlines. What is the flag and operation important, not the origin of the aluminum tube and its engine?

However, there were specific costs to not worry enough about dependencies, such as Russian natural gas and Chinese exports, according to Leevi Saari, a researcher at the University of Amsterdam. With technology still being driven so heavily by globalized supply chains, outsourced labor and dominant vendors, what is being offered today looks like “sovereignty as a service” – the autonomous rapper. After all, it may be the presence of alternatives like Airbus SE that will make airlines very relaxed.

If AI sovereignty is a valuable goal, Europe needs to do more than come up with new wrapping of the same chip. It has the advantages of talent, skills, companies where ASML holds NV, and automotive industry bases with ripe innovation. But what it lacks is an ecosystem with abundant research spending, funding and end-user demand. According to AVP, it's the kind that helped startups raise more than twice as much funding as their European counterparts last year. It won't change in one day, but that according to Nathan Benetci of the Air Street capital, it won't change in one day that they should have invested in chip independence to ensure “sufficient” alternatives and diversify risks. He believes the alternative is digital colonialism. We hope that Huang's leather jackets will be seen more frequently as China follows the post-deepsec path and the US embraces the hemisphere.