Warnings of an AI bubble be damned. (Fabrice Coffrini/Getty)
The term itself is almost quaint nowadays. But when Emmanuel Macron leaves office next year, he won’t have much to show for his 2017 pledges to turn France into the “start-up nation”. That’s not for lack of trying. Few would deny that the lame-duck President has been an obliging friend to investors and corporations, often at the price of the social and political turbulence that has defined his two terms in office.
It just turns out that digital capitalism is a cruel game of gatekeepers and first-past-the-post market power. France, like the European Union as a whole, remains as embedded as ever in a digital economy lorded over by Silicon Valley. Today, it’s a reality best represented in the €264 billion deficit in digital services whisked out of the EU common market by US corporations. The legacy German software company SAP, Europe’s largest tech sector “champion”, is middling compared to its American peers. Artificial Intelligence hopefuls like France’s Mistral AI do make headlines. But they remain blips on the chart next to the leading California and even Chinese firms.
Still, it was no doubt with an eye to his legacy that Macron early this summer sought some sort of victory, albeit in the far less glamorous business of data centers. In June, Japanese lender SoftBank duly announced a €75 billion spending spree on French data-center capacity, spelling a roughly five-gigawatts surge in computing power. And, for Macron, this is proof that France is at last making inroads in scaling up the infrastructure that defines Europe’s tech sector, especially given his country’s relative strengths elsewhere. In OVH Cloud, for instance, the country already boasts one of Europe’s largest homegrown cloud and compute providers, and this on a continent where Amazon, Google and other US “hyperscalers” control some 70% of the market. But France’s real trump card is energy. In 2022, Macron announced a significant expansion of the country’s arsenal of nuclear power plants — even if that now seems set to be gobbled up by the gargantuan demand-shock for electricity from data centers.
Digital infrastructure can, of course, be sized up by processing power — in terms of the raw quantities of data being handled. These are the sweatshops of the big data age, tasked with storing, processing, and sifting the masses of information on which AI foundation models run. But they are also measured by what they consume, whether that’s the sophisticated chips in their servers or the tons of rare metals required to manufacture them. As for energy, those newly announced data centers are predicted to consume the equivalent of 10 nuclear reactors.
Sooner or later, then, France’s data-center euphoria will be forced to contend with a tight knot of contradictions. Many of these are inherent to the technology itself, already clear in the way limited water resources and strained electricity markets are driving local pushback to data centers in the US. With French planners giddily talking of reindustrialization by data center, these tensions can be expected to repeat themselves.
For now, however, with local opposition still sporadic, planners and operators see few reasons not to accelerate. Public utilities like electricity producer EDF, which was re-nationalized in 2023, or the transmission operator RTE, are promising “fast-track” hooks up for operators. Recent state decrees, alongside an omnibus deregulatory package adopted by parliament this spring, are aimed at speeding up groundbreaking, removing permitting powers from municipalities and even curtailing the possibility of public reviews.
Warnings of an AI bubble be damned: in France, data centers now bear the stamp of a national cause. Macron, for his part, would no doubt like the investment push to be seen as one of the so-called “grands projets” periodically undertaken by French presidents since de Gaulle. Just as France’s independent nuclear deterrent ensured dignity in the Cold War, and civilian nuclear power protected the country from energy shocks in the Seventies, data centers are being touted as a way of resisting Europe’s digital colonization by the so-called “GAFAM”: the French acronym for Google, Apple, Facebook, Amazon and Microsoft. On paper, at least, it’s a seductive story, even if the French public has yet to take much measure of the commitments being made in its name.
Yet cutting dependence on Silicon Valley is far harder in practice. It’s no coincidence that Macron and his allies have long pushed for a more assertive tech policy from the EU, one component of the French President’s broader calls for “strategic autonomy” vis-à-vis Washington. In recent years, though, this position has been in the minority. A first wave of EU tech legislation — from 2016’s GDPR rules, to the Digital Markets or Services Acts of 2022, and the AI Act of 2023 — put some limits on the worst abuses of the tech majors: while also punting on the comprehensive industrial policy needed to make up for Europe’s technological lag. One reason for this continued caution? Donald Trump’s eagerness to come to the defense of US tech giants in their regulatory skirmishes with Brussels.
So are the winds shifting in Paris’ favor? On the heels of the investment surge in France, Brussels announced a new “tech sovereignty” package that supposedly has the bloc reclaiming “its place in the global race for geoeconomic power”. European institutions are also preparing a “Cloud and AI Development Act”, with the goal of tripling data-center capacity by the early 2030s and scaling up of European-based companies across the tech economy. A new Chips Act purports to reinforce EU production and supply chains for advanced microprocessors.
For boosters, this is a sign that Brussels is finally taking the geopolitics of technology seriously. And this summer, Macron’s government also announced it would phase out its contract with Peter Thiel’s Palantir, replacing the American military-tech company’s software — used by French intelligence services since 2016 — with a model created by French startup ChapsVision.
All the same, pressure remains not antagonize Washington. Weeks after introducing its tech sovereignty package, for instance, the European Commission in late June signed up to the Trump administration’s so-called “Pax Silica” alliance on the critical minerals and chip supply chains needed for AI. “There is a case to be made for more compute capacity that is sovereign and located in Europe,” says Giorgos Verdi, a policy lead with the Europe branch of Open Markets Institute, an anti-monopoly think tank and advocacy group. “At the same time, it’s very important to define, before rushing into the craze of data-center build outs, what this sort of capacity is used for.”
When it comes to Europe’s tech ambitions, separating fact from myth is not always easy. That goes for the much vaunted, and just about always inflated, jobs figures supposedly stemming from the opportunity at “reindustrialization” represented by new sites. It also goes for the use of the new compute capacity itself, which on its own will do little to dent the structural advances of Silicon Valley.
With or without that new processing power, meanwhile, the fundamental problem remains US control over the commanding heights of the digital economy. Lou Welgryn, president of the Paris-based Data for Good, tells UnHerd that a mad rush for data infrastructure could “reinforce dependence on actors that dominate the technological core”. Without European alternatives further up the value chain, expanded compute capacity will merely service the same corporations that already control the digital economy today.
Just follow where the capital flowing into European processing power is coming from, with US tech majors present, either directly or through local partners, in many of the largest data-center projects. As Masayoshi Son, SoftBank’s CEO, has pointed out, his bank’s data-center spree simply involved aggregating various capital sources — and working closely with an unnamed “hyperscaler”. According to a French senate report published last month, a mere 1.4 gigawatts of 15 gigawatts of projected data-center investments is of European origin.
There are other ironies here too. What Welgryn calls “digital sobriety” seems to be heading for the dustbin of history. But amid an ecological crisis, and a cost-of-living crunch that shows few signs of receding as the leading preoccupation for French citizens, what of the so-called “energy sobriety” that was, until quite recently, held up as a societal totem?
A big-data blitz will only add to simmering tensions over stretched water resources; rage over rural water reservoirs, built in the interests of agro-industry, has already sparked battles between protestors and riot police. This summer’s historic heatwave has rivers like the Loire almost running dry, even as wildfires rip through swathes of French countryside. One recent report classifies as “high risk” the environmental exposure of at least a quarter of French data-center projects. From climate “resilience” to data sovereignty, a lot seems to be riding on the panacea of limitless nuclear energy.
Macron’s closing gesture towards strategic planning ought to have been the chance to strike a balance between these mounting constraints and conflicting priorities. Tech sovereignty today surely needs a material infrastructure, but it cannot just be about opening the electrical spigot to Silicon Valley. Who knows, it could even be about placing some hard limits on big data itself. Until then, France and Europe risk being pigeonholed into a developmental path that just means taking on more of the dirty grunt work of the digital economy. If, or rather when, a data-center backlash comes, Macron’s successor can expect to have their hands full.