Europe shrugs off tariffs, plots to end tech reliance on US
- Reference: 1770131117
- News link: https://www.theregister.co.uk/2026/02/03/europe_tariffs_forrester/
- Source link:
A [1]new forecast from Forrester says that European tech spending will climb 6.3 percent in 2026, lifting the continent's tech bill above €1.5 trillion for the first time, as governments and enterprises pour cash into AI, cloud, cybersecurity, and the infrastructure needed to run them without leaning quite so heavily on US providers.
US tariffs are already causing problems, and Ireland is feeling it more than most thanks to its reliance on US multinationals. The knock-on effect is a smaller EU trade surplus and slower growth in the countries most exposed. Even so, Forrester expects the wider EU economy to hold its nerve, with real GDP growth in 2026 matching 2025, supported by strong intra-European trade and a steady ramp-up in defense spending.
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That resilience is showing up most clearly in tech budgets. Hardware leads the charge, with spending forecast to jump 14.3 percent as organizations scramble to buy AI-optimized servers and supporting infrastructure. Software follows closely behind, with an 11.2 percent increase driven by demand for cybersecurity tools and public cloud platforms. IT services growth lags at 3.7 percent, a gap that suggests a broader shift toward owning critical capabilities rather than renting them indefinitely from hyperscalers.
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Forrester frames much of this as a sovereignty play, and it is hard to argue otherwise. Across Europe, money is going into sovereign cloud platforms, AI-ready infrastructure, and tighter rules on where data lives and who can access it.
The UK, Brexit or not, is heading the same way, putting more weight behind domestic AI compute, cloud infrastructure, and homegrown chip efforts.
[5]EU won't scrap tech regs just because Washington dislikes them
[6]Brussels plots open source push to pry Europe off Big Tech
[7]Euro firms must ditch Uncle Sam's clouds and go EU-native
[8]Open source's new mission: Rebuild a continent's tech stack
Defense and healthcare sit at the center of that strategy. Forrester expects UK defense R&D spending to grow by about 9 percent a year from 2026 to 2030, driven by geopolitical tensions and a renewed appetite for advanced equipment. Healthcare is heading the same way, with NHS technology spending on track to almost double to £10 billion by 2029 as the service leans on digital systems to plug staffing gaps and keep aging infrastructure going.
Michael O'Grady, principal forecast analyst at Forrester, says the UK has largely moved past AI dabbling and into day-to-day use, especially in financial services, where - he claims - around three-quarters of firms already have AI running in production.
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"The UK is moving swiftly from AI experimentation to performance, particularly in the [10]financial sector ," he said. "Despite external economic pressures and tariff risks, the UK's strategy to increase AI compute capacity and target £22.6 billion in R&D spending by 2030 signals a clear, long-term vision for technological leadership."
Forrester isn't pretending tariffs, power limits, or geopolitics have magically disappeared. What the numbers do show is that Europe has stopped waiting for things to calm down.
The money is going in now, sovereignty is back on the agenda, and the thinking seems to be that owning more of the stack is less painful than relying on it later. ®
Get our [11]Tech Resources
[1] https://www.forrester.com/press-newsroom/forrester-global-tech-forecast-2025-to-2030/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aYIps3vsz1Yu8dTPhR27_wAAAII&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aYIps3vsz1Yu8dTPhR27_wAAAII&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aYIps3vsz1Yu8dTPhR27_wAAAII&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2026/01/05/eu_us_tech_regulation/
[6] https://www.theregister.com/2026/01/11/eu_open_source_consultation/
[7] https://www.theregister.com/2026/01/30/euro_firms_must_ditch_us/
[8] https://www.theregister.com/2026/01/19/open_sources_new_mission_rebuild/
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aYIps3vsz1Yu8dTPhR27_wAAAII&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2026/01/20/treasury_committee_ai/
[11] https://whitepapers.theregister.com/
Oh....Sovereignty Again...................
Quote: "...domestically controlled infrastructure..."
Daydream!!!
Everything connected to the internet can be hacked by..............
- Chinese hackers
- Russian hackers
- Fort Meade hackers (....Snowden....)
- Cheltenham hackers
"Sovereignty"..................PLEASE give me a break!
Thinks.........."air gap"........"private data centre"........................
Re: Oh....Sovereignty Again...................
I see sovereignty and hacking as two separate issues.
The first is controlling one's domain, putting moats around your castle, air gaps around your computing tech - and we certainly need one in the Atlantic.
Then comes the challenge of making those work, keeping the hackers out and data being exfiltrated or given away to the enemy. While 100% air gaps can work in limited circumstances they are not practical when there is still a need to digitally communicate with the rest of the world, or even select partners.
We shouldn't be isolating ourselves, hiding in the dark; we should be isolating the enemy, embracing our friends, and need to be dynamic in doing that as the sands shift.
Re: Oh....Sovereignty Again...................
Atlantic? No, our friends are the Anglosphere countries - including the USA (though that is certainly challenging at the mo' with many of Trump's excesses).
Re: Oh....Sovereignty Again...................
Go back and read the title of TFA. "We" is ourselves and fellow Europeans in this context. And note that "Europeans" covers more than the EU. Yes, there may be Anglophone countries with common interests too. Canada certainly has common interests in this although Quebec wouldn't thank you for calling them Anglophone.
There may be a push for homegrown tech, but last I looked, both the UK and EU still happily allow the brightest and best such companies to be bought out by overseas competitors, and there is very little in place to prevent that from happening.
Further, if such preventative blocks were put in place, then it could quite easily have the unintended consequence of pushing new investment outside of the region, as entrepreneurs started discovering that potential paydays were then much reduced.
So while I agree with the overall direction, I'm not sure that the path is quite as clear cut as some people believe
Do you think the UK needs more Autonomy?
Nice work.
Now here's your coat, go away and reflect on what you did here... ;-)
Do you think the UK needs more Autonomy?
It certainly needs less Palantir.
I think if a similar mike-drop moment occurs, they'll send in the lynch mob, the whole thing will become unstable and the ship will sink...
Ok - bad taste - bring on the downvotes, I can take it... ツ
I'm in Deepmind to downvote...
You tried so hard to cram those puns in that the whole comment sounds a bit Bayesian.
Ah, thanks, mine's the slightly damp one --->
Well.....I'm Racking My Memory.................
Quote: "....homegrown tech...."
That would be......what? INMOS? Hawker Harrier? BBC Micro?? Half of Concorde???
I believe that if we're to create any kind of Sovereign Cloud it will have to be through a government-owned company.
Partly so that profits can be re-invested to assist in growth and service development, but also to avoid loss of sovereignty through sale.
The US Cloud Act means that any US-owned company is incapable of providing the required security. As does an act in China. And no government wants to be seen to stand in the way of the Almighty Market, lest the City take its revenge.
So we should prevent it from ever being a problem by making it a government-owned but arms-length and not-for-profit company.
Government-Owned Cloud.......
Quote: ".....Cloud....."
....that would be yet another computer ("YACO") out there.....................................
So................exactly what would "government-owned" get us? Please explain........
Totally right. Because nothing screams "Value for money", "Agility" and "Innovation" like Government Cloud. That's why I don't go to local coffee shops to get a flat white, but I go to the local council offices which make a much nicer brew in their canteen. Yum.
The buy-out issue is mostly a symptom, not the disease. Overseas firms can only buy UK companies if the owners are willing to sell, and the system increasingly nudges them in that direction.
Running a business here has been turned into a slow grind unless you already have deep pockets, specialist advisers, and a tolerance for permanent regulatory churn. After a few years of that, many founders conclude there are no “sunlit uplands”, just more cost, more paperwork, and less upside. Selling up or relocating starts to look rational rather than greedy.
That is what happens when the institutions meant to safeguard fair competition and long-term national interest stop doing so in any meaningful way. Meanwhile public money flows freely to large foreign firms via incentives, special deals, and procurement, while domestic businesses face higher taxes, worse services, and shrinking support.
In that environment, it’s not surprising that homegrown companies cash out early. The problem isn’t that Britain is too open to acquisition. It’s that it has become increasingly hostile to building and sustaining independent businesses in the first place.
"both the UK and EU still happily allow the brightest and best such companies to be bought out by overseas competitors, and there is very little in place to prevent that from happening."
Having being European owned and managed as its USP would provide a good deal of protection. A potential buyer would have to view the non-sovereign potential as outweighing the prompt loss of the existing customer base.
Yes Minister...
The UK, Brexit or not, is heading the same way, putting more weight behind domestic AI compute, cloud infrastructure, and homegrown chip efforts.
So the UK govt AI policy will be running it on a Raspberry Pi 5 sitting somewhere in Whitehall?
Or at least it was until this morning's price rise announcement, which has probably put the hardware beyond the budget...
Meanwhile, back in the real world
This is all vapourware.
I'll believe the tanker has changed course when the job adverts reflect it. Which they don't.
The unpleasant truth is so many people have "invested" so much in being able to put up with MS that there will be a plethora of "reasons" why any individual outfit can't switch.
"organizations scramble to buy AI-optimized servers and supporting infrastructure"
Why?
What they should be scrambling to bout is H/W optimised for the line of business applications that they've moved to foreign owned cloud purveyors. Given that they've been running such applications without AI for years and given the low ROI being reported for AI the priorities should be clear. If - and it's a big if - AI still looks worthwhile once they've done that, then they can look to adding AI-optimised servers.
s/bout/buy/
The scope is not large enough
>> without leaning quite so heavily on US providers
It should be to remove all dependence on US providers. The US is not Europe's friend. The Orange sex abuser has said as much.