A report from the insurance group Allianz warns that Europe is sliding into a technology “dependency trap” as artificial intelligence reshapes global trade. The continent’s reliance on Asian hardware and American cloud services leaves it vulnerable to supply-chain disruptions and geopolitical pressure, the study argues.
Asia and the US Dominate AI Trade
Asia now accounts for 65 percent of global exports in AI-related goods, with seven of the top ten exporting nations located in the region. The global AI trade has surged from roughly $1 trillion in 2014 to $3.8 trillion in 2025, according to the report. Meanwhile, the United States has tripled its AI-related imports since 2023, driven by massive investments in data centres and cloud computing. Nearly half of the world’s data centres are located on American soil.
Europe’s AI-related imports have risen by only 40 percent over the same period, highlighting what Allianz calls a widening “infrastructure gap.” The bloc plays a “modest” role across the AI supply chain, which leaves it with “limited strategic leverage and meaningful exposure to supply-chain disruptions.”
Dependence on American Cloud Giants
American technology companies control up to 40 percent of Europe’s operational computing capacity and nearly half of upcoming data centre projects. These firms benefit from weak private investment in European alternatives and low competition from local players. The US holds an 80 percent market share in Europe’s cloud computing market, 59 percent of enterprise software revenue, and 73 percent of customer management software. Non-US firms are left “to compete for the remaining margins.”
The report notes that “structural constraints, fragmented regulation, complex permitting processes, grid connection delays, no domestic hyperscaler and limited VC or state-backed funding reinforce this dependency.” It adds that Europe is “permanently under the threat of a US 'kill switch' on cloud data, meaning that the country can turn off these services whenever it wants.” This could create a widening EU-US service imbalance if AI-related markets develop abroad.
Hardware Reliance on Asia
Europe also depends heavily on Asian hardware, particularly graphic processing units (GPUs) essential for training AI models. The bloc imports 57 percent of all its IT equipment and more than half of the hardware for its data centres from five Asian countries: Taiwan, China, South Korea, Malaysia, and Vietnam. This reliance on Asian hardware “complements” the US dependence and will “increase” without independent European investment in that area, the report warns.
The ‘Dual Deficit’
The continent suffers from what Allianz calls a “dual deficit”: insufficient private capital and fragmented public policy. In the US, private companies pour hundreds of billions into AI infrastructure; in China, the state streamlines investment. Europe, by contrast, faces regulatory and capital constraints that must be cleared to “avoid falling into a technology dependency trap.”
Building data centres in Europe is notoriously slow. Limited land options in cities, complex permitting processes, and environmental regulations mean some projects take up to four years to get off the ground. In parts of Europe, it can take five years because providers cannot connect to ageing power grids with limited capacity to handle the intense energy demands of new centres.
Glimmers of European Strength
Despite these challenges, the report identifies areas where Europe retains competitive advantages: industrial engineering, automated systems, and regulatory AI. It praises initiatives like sovereign computing projects in France and Sweden, which aim to move public services off US platforms such as Google or Amazon Web Services (AWS) and invest in European solutions.
The findings come as Europe seeks to diversify its trade relationships. The recent EU and Mexico trade deal is one example of efforts to reduce dependence on both the US and China. Meanwhile, the Visegrád Four in Central Europe is re-emerging as an economic powerhouse, potentially offering a regional counterbalance.
Allianz’s report underscores that without coordinated action—combining private investment, streamlined regulation, and strategic public funding—Europe risks being locked into a subordinate role in the AI-driven economy of the coming decades.
