By Gustavo de Arístegui.
21 December 2025
Europe Facing the New Technological Cold War: From Industrial Leadership to Digital Vassalage
The Old Continent runs the risk of assuming the role that nobody wants: that of a decorative power that regulates but does not manufacture.
Gustavo de Arístegui
The world is living through a new Cold War that was not born in Berlin or Kabul, but in laboratories of artificial intelligence, factories of chips in Taiwan and Korea, and rare earth mines controlled by China and centers of data managed from Silicon Valley. It is a cold war without missiles, but with algorithms, semiconductors, and strategic raw materials. In this board, Europe runs the risk of assuming the role that no one wants: that of a decorative power. A power that regulates, preaches, and dictates strategies… but does not control its data, nor the primary materials, nor the technological techniques that will decide who the dominant forces of the 21st century are.
The technological angle is no longer a nuance of geopolitics; it is its central axis. The domain of artificial intelligence, the smallest microchips, quantum computing, autonomous drones, and the control of strategic materials will not only lead the global economy but will set standards, impose dependencies, and allow a rival to be neutralized without firing a single shot. Whoever loses this race, on the contrary, will pass to the third geopolitical division: rich perhaps, but irrelevant. And today, that candidate is called Europe.
The rivalry between the United States and China has converted technology into a first-order geopolitical weapon. We are no longer talking about ballistic missiles, but about models of artificial intelligence trained with astronomical quantities of data; of semiconductors of a few nanometers that fit on a fingernail and move entire economies; of quantum computers that, when they mature, will break the cryptography that today protects our communications; and of swarms of cheap drones that are changing the way war is fought in Ukraine, the Middle East, or the Indo-Pacific.
The US preserves leadership in innovation, talent, and venture capital. Silicon Valley continues to produce the AI models that mark the pace and capture a good part of the global private investment. China, for its part, dominates the industrial scale, the manufacturing of critical components, and the processing of strategic materials. It has built its own Digital Silk Road and controls around 70% of the global supply of rare earths and almost 90% of the refining capacity. And Europe? Excellent regulators, good scientists… and a growing list of dependencies. In artificial intelligence, the data is devastating: of the 50 largest technological giants, only a handful are European. In 2024, the American-led institutions put about 40 large AI models into the field; China, about fifteen; Europe, barely three. We are consumers of foreign platforms, not architects of the digital infrastructure on which the economy functions.
The image that is painted is bleak, but real. In the cloud, we depend almost totally on three American giants: Amazon, Google, and Microsoft Azure. In 5G, the global struggle is fought between Chinese providers and the two European actors fighting to survive. In semiconductors, our industry and our armies depend on chips manufactured in Asia. In data, the US Cloud Act and the power of its platforms grant them a capacity for access and control that Europe does not have.
Emmanuel Macron has said it bluntly: if we let the Americans and Chinese have all the technological champions, Europe will simply be a “client.” A client who pays, protests… but does not decide. A digital vassal.
Because sovereignty in the 21st century is no longer measured only in tanks, gas pipelines, or GDP. One must ask much more basic questions: who manufactures your chips? Who controls your cloud? On whom do your satellites, your payment systems, your algorithms depend? Today, the European response, in too many cases, is disturbing: we depend on others.
Points of Strangulation
There are five fronts on which the power of the 21st century is decided, and in all of them, Europe appears out of step.
First, artificial intelligence. AI is not just an app; it is the invisible infrastructure that reorganizes the economy, work, defense, and even propaganda. Whoever controls the models and the data will set the standards and capture the added value. In this field, the real battle is US-China. Europe arrives late and poorly, trapped between a well-intentioned overregulation that stifles its startups and a chronic lack of investment: less than 5% of global investment in AI.
Second, the “Silicon Shield.” Semiconductors are the heart of any modern system—from an F35 to an electric car or a mobile phone. The production of the most advanced ones is hyper-concentrated in Taiwan, in what has been called the “Silicon Shield.” That concentration deters, for now, an open invasion of the island, but it creates a gigantic vulnerability for the West. The United States has understood this and launched its CHIPS Act, with tens of billions of dollars to relocate factories to the US. Europe, in contrast, moves slowly, outsourcing production. To try to bridge this gap, the “European Chips Act” is being drafted—which arrives late and lacks muscle.
Third, quantum computing. The quantum revolution has not yet fully erupted… but it will. When it does, the rules of espionage and defense will be rewritten: to start with, breaking current cryptography, sensing systems capable of locating submarines or hidden infrastructures, or navigation without GPS, to mention just some of the breakthroughs it will trigger. The United States and China invest in strategic scale and prepare concrete applications of quantum computing. Europe has brilliant scientists but lacks coordination or sufficient financing.
Fourth, drones and autonomous warfare. Ukraine has shown that the war of drones is not an anecdote, but a paradigm shift. Kamikaze drones, cheap and disposable, that saturate defenses; permanent recognition systems that turn the front into a transparent space. Whoever dominates the sensors, software, and mass production of autonomous systems will have a structural military advantage. Europe knows it… but its programs are delayed, and its industries compete with each other instead of integrating or coordinating.
Fifth, critical materials and rare earths. Without these materials, there are no wind turbines, electric vehicles, guided missiles, or satellites. A fifth-generation fighter jet can incorporate hundreds of kilos of rare earths. The key to that faucet is held by China, which not only controls the mines but, above all, the refining—expensive, polluting, and which for years we preferred to outsource.
Europe in the Geopolitical Third Division?
What does this accumulation of delays and dependencies imply in practice?
In the first place, economic subordination. If you don’t lead the cutting-edge technologies, you don’t capture the added value. Your companies compete in costs, not in innovation. Your best startups end up absorbed by giants from other latitudes. Your standards are applied on platforms you don’t control. Result: a continent that is still rich, but increasingly aged, less dynamic, and condemned to grow below those betting on the new technological frontier.
In the second place, vulnerability in national security. A Europe that depends on Asian chips, American software and cloud, and Chinese rare earths is a vulnerable Europe to a crisis in the Indo-Pacific, to foreign regulatory decisions, and to political pressures. Talking about “strategic autonomy” while needing the consent of third parties to maintain your defense systems or your digital economy is, at best, naive, or rather, an unforgivable irresponsibility.
In the third place, loss of geopolitical influence. In the 20th century, the pound or the dollar ruled. In the 21st century, a decisive factor is added: the control of the global digital infrastructure. Whoever defines AI standards, masters the communication platforms and control of the data processing centers of the planet, conditions the rest. In this board, Europe runs the risk of becoming what many see: a “regulatory power without technological power.”
Are we condemned to irrelevance or is there room for maneuver?
From the crossing of data and trends, three scenarios emerge.
The first is the pessimistic: Europe as a technological museum. We continue as we have been until now: regulatory fragmentation, industrial nationalisms, low investment, flight of talent to the US and Asia. The big technological giants continue to be American or Chinese. Europe regulates, imposes fines, dictates ethical lessons… but builds no alternatives.
The second is the intermediate: junior partner of the United States. Europe accepts de facto its role as Washington’s little brother. It provides some market, some specific industrial capacities—ASML, Airbus, the chemical and automotive industry—and diplomatic legitimacy. In exchange, it assumes its dependence in defense, cloud, AI, and chips.
The third is the optimistic: the European awakening. The most difficult, but still possible. It requires brave and, above all, fast political decisions. Completing a true digital single market. Creating a European venture capital fund, of hundreds of billions, to scale own projects. Investing coordinately in chip factories, AI centers, and quantum programs. Consolidating the defense industry in a few pan-European champions and securing supply chains of critical materials through alliances with like-minded democracies.
The conclusion is uncomfortable, but inevitable: either Europe reacts now or it will end up in the third geopolitical division of the 21st century. It is not just about “competitiveness” or “innovation”; it is about whether the Old Continent will be the subject or the object of the decisions that others take on AI, autonomous warfare, technological standards, and supply chains.
There is room to react, but every year of inaction the bill goes up and the gap with the United States and China widens. A continent that was able to reconstruct itself after two world wars, that designed one of the most prosperous zones of the planet and that still concentrates scientific and industrial talent, should not resign itself to being a technological vassal of anyone.
Europe has the market, technology, and industrial capacity. What it lacks is what has always been decisive in history: political will, a long-term vision, and the capacity to sacrifice national smallness in favor of an ambitious common project. The clock has started to tick. And in this new technological cold war, arriving late is not an anecdote: it is accepting, without saying it, that the future will be written by others.