A sign of the times as Europe belatedly wakes up to the degree of its reliance on US tech platforms and much more, and the potential ramifications of a hostile White House
Microsoft's leadership arrived in Brussels this week with a message aimed at soothing anxieties rippling through European capitals. Brad Smith, who serves as both president and the company's top legal officer, announced plans to substantially increase data centre infrastructure across the continent. His visit comes as policymakers grapple with the continent's deep entanglement with American technology platforms and the uncertainties posed by an unpredictable administration in Washington.
Smith vowed that Microsoft would resist any attempt by the US government to restrict platform access, including through legal action if required, to maintain what he termed "continuity of access". The European market represents roughly 25% of Microsoft's total revenue, making the region strategically vital to the company's global operations.
The Make America Great Again movement harbours significant hostility toward major technology corporations, though the current US President maintains cordial relationships with their billionaire executives. Trump's approach to tariffs demonstrates his willingness to disrupt global financial stability. The rapid succession of executive orders from the administration creates enforcement challenges that make legal resistance difficult to mount.
Whether Microsoft can actually deliver on such commitments remains uncertain given the unpredictable nature of potential future US government actions targeting technology companies.
Increasing US-owned capacity is the answer?
Smith referenced the turmoil that swept across Europe when the Trump administration halted military assistance and intelligence sharing with Ukraine in early March, following a contentious public confrontation between Trump and Ukrainian President Zelensky the previous month.
The Microsoft executive committed to raising data centre capacity by 40% over the coming two years and broadening the company's footprint across 16 European nations. However, recent reporting suggests Microsoft's European data centre strategy may be less straightforward than these announcements indicate.
According to Reuters coverage from March, Microsoft appeared to be scaling back its European data centre expansion plans, citing concerns about infrastructure capacity relative to artificial intelligence requirements and reassessing its approximately $14 billion commitment to AI technology.
Smith additionally stated that Microsoft's European cloud operations will be managed by a board composed of European directors and will operate under European legal frameworks.
Cost and speed versus sovereignty?
The European Commission has set an ambitious target to triple EU data centre capacity within five to seven years. This objective forms part of a broader initiative to maintain competitive positioning in artificial intelligence development globally while establishing independent ownership of critical infrastructure to reduce dependence on foreign technology providers.
Amid mounting pressure and public criticism from US officials, including Vice President Vance who initiated this confrontational phase in February, some European voices have advocated for excluding American firms from government procurement processes.
Smith's approach diverges from other major technology companies that have adopted confrontational stances toward European Union regulatory oversight. Instead, he has positioned Microsoft as seeking constructive engagement. According to reporting from Politico, Smith characterised Microsoft as a "voice of reason" committed to fostering "stable" transatlantic relationships.
The existing EU-US Data Transfer System increasingly appears inadequate for current circumstances. This framework governs the movement of personal information between the EU and the US, jurisdictions with substantially divergent data protection requirements.
Since 1995, EU law has restricted personal data exports unless the destination country provides "essentially equivalent" data protection standards. The United States operates under legislation including the Foreign Intelligence Surveillance Act Section 702 and Executive Order 12.333, which grant government agencies broad authority to access information held by major technology companies such as Amazon, Meta, and Google.
In response, the European Commission established the Transatlantic Data Privacy Framework in 2023, permitting EU organisations to transfer data to American service providers through executive order mechanisms and US government assurances. The Privacy and Civil Liberties Oversight Board oversees this arrangement.
Yet the TADPF protections have not been codified into US legislation. According to Digital Samba, Trump removed three Democratic appointees from the PCLOB in late January 2025, intensifying questions about the framework's reliability.
Contrasting with these limited safeguards for European data, the United States enacted the CLOUD Act in 2019, granting American law enforcement the authority to compel disclosure of data held by major cloud providers regardless of physical location—a provision that potentially contradicts the EU's General Data Protection Regulation.
The practical outcome if these competing legal regimes clash remains unclear, with GDPR protections facing an uncertain future against American enforcement powers.
