* Tech sovereignty dominates G7 and VivaTech discussions as

Europe confronts U.S. AI dominance

* U.S. export controls on advanced AI models underscore

European vulnerability to foreign policy shifts

* European AI firms remain dependent on U.S. cloud

infrastructure, chips, and models

By Supantha Mukherjee and Leo Marchandon

PARIS/STOCKHOLM, June 17 - Europe's quest for technological

sovereignty will dominate discussions at the G7 in France and

the VivaTech conference in Paris this week, as policymakers and

technology executives fret about American AI, with alternatives

remaining scarce.

The gatherings come days after the United States tightened

restrictions on Anthropic's most advanced AI models for foreign

nationals, underscoring Europe's vulnerability that political

whims could derail its race to build domestic AI champions.

"Tech sovereignty will be top of mind this week at

VivaTech," Ana Paula Assis, senior vice president at IBM ( IBM )

, told Reuters.

"For European organisations to get this right, it is vital

to understand sovereignty is about having control where it

matters - not where the technology is from."

The debate reflects a broader dilemma facing Europe: how to

maintain strategic autonomy while remaining dependent on

American technology companies that dominate cloud computing,

semiconductor design, and cutting-edge AI research.

The Group of Seven (G7) nations have gathered in Evian, France,

where they are meeting top executives from the biggest AI

companies including Anthropic, OpenAI, Alphabet's

Google, and Mistral to discuss AI competitiveness, regulation,

and reliance on China for critical minerals.

In Paris, over 180,000 visitors, startups, investors,

policymakers and executives including Amazon's ( AMZN ) Jeff

Bezos are expected to attend VivaTech, where discussions are

likely to focus as much on geopolitics and policy as on the

actual tech.

French startup Mistral, seen as Europe's leading AI contender,

is doubling down on partnerships with European firms,

particularly in industries where the region says it has an edge.

Despite billions of euros of investment, European AI firms

continue to rely heavily on U.S.-controlled cloud

infrastructure, chips, and foundational AI models.

EUROPE PUSHES TO BOOST REGIONAL CLOUD, CHIPS

France has been a prominent supporter of European tech

sovereignty, with the government increasingly looking to replace

U.S. providers in government services.

"We cannot rely on tools developed by foreign powers. France

must have its own tools," said Prime Minister Sebastien Lecornu

on Tuesday.

The European Commission is assessing the ​practical

implications of the U.S. export control directive and that

measures should not be discriminatory ​against partners.

European policymakers have increasingly framed AI as a

matter of economic and national security. The European

Commission recently unveiled plans for AI "gigafactories" and

large-scale computing infrastructure designed to provide the

region with sovereign access to computing power.

It has proposed laws to boost domestic cloud, AI and

semiconductor industries and cut reliance on U.S. Big Tech,

though critics say Europe remains years behind U.S. rivals.

"It's patently clear, if it wasn't before, how important it

is for Europe to have access to an AI service that it can

control, that will never be switched off on a whim," said

telecoms firm Orange in a statement.

For companies, boosting sovereignty comes at a cost,

however, and they need to weigh that against a perceived risk,

said Capgemini chief operating officer Karine Brunet, adding

that European cloud alternatives require paying premiums of up

to 40%.

"The alternative is not simply replacing one provider with

another," said Francois Bitouzet, managing director of VivaTech.

"It is about building more resilient technology strategies,

where companies can draw on European innovation for the most

critical parts of their stack while still working with global

partners where it makes sense."