Policymakers, tech companies, and industry analysts are all talking about recent changes in digital sovereignty and the power of big tech in Europe. The partnership between Microsoft and Mistral AI in Paris is at the center of these discussions. It has caused people to worry about digital sovereignty in Europe and what that means for the future of AI infrastructure across the continent. French lawmakers have been worried for a long time that the US Foreign Intelligence Act (FISA) and the Cloud Act cover more than one country. These laws say that US security agencies can force US businesses or people to share private foreign data.
The European Union Pursues Cybersecurity
In the past few years, one of the main themes has been Europe’s quest for digital independence. There have been many efforts to make Europe less reliant on tech giants like Microsoft and Amazon Web Services (AWS). Part of the reason for this push is the need to make sure that European data and digital infrastructure follow local rules and safeguard national interests. Techzine Europe pointed out that the partnership between Microsoft and Mistral AI has caused a discussion about whether these kinds of partnerships help or hurt Europe’s goals for digital sovereignty. Some people say that relying on American cloud infrastructure could make it harder for the EU to keep control of its digital environment.
Microsoft’s Mistral Equity Transition
On Monday, a Microsoft representative revealed that the company put money into Mistral but did not own any shares. Later, Microsoft made it clear that its investment would turn into equity in the next round of funding for the company. This is a common way for big tech companies to invest in AI startups without putting a value on them. In a funding round in December that included investors like Andreessen Horowitz and Lightspeed, Mistral’s last estimated value was 2 billion euros. Microsoft tried to make it clear that it did not own a stake in OpenAI and could not control it when it came under pressure from regulators over its multibillion-dollar investment in the company late last year. As payment for the investment, Microsoft has access to OpenAI’s cutting edge models and the right to share OpenAI’s profits. This deal is being looked at by antitrust authorities in both the EU and the US.
Legal Impact on Digital Markets
The Digital Markets Act (DMA) and other rules made by the European Union are meant to make the digital market more competitive and fair by controlling how big tech companies act. According to No Jitter, enforcing the DMA could have a big effect on how these companies do business in Europe, which could make room for European alternatives. The challenge now is to make sure that these rules do not unfairly help companies from outside of Europe or stop new ideas from happening in the EU.
