Tech giants are investing in ‘sovereign AI’ to help Europe cut its dependence on the U.S.

Published

11 months ago

November 14, 2024

admin

Dado Ruvic | Reuters

LISBON, Portugal — Tech giants are increasingly investing in the development of so-called “sovereign” artificial intelligence models as they seek to boost competitiveness by focusing more on local infrastructure.

Data sovereignty refers to the idea that people’s data should be stored on infrastructure within the country or continent they reside in.

“Sovereign AI is a relatively new term that’s emerged in the last year or so,” Chris Gow, IT networking giant Cisco’s Brussels-based EU public policy lead, told CNBC.

Currently, many of the biggest large language models (LLMs), like OpenAI’s ChatGPT and Anthropic’s Claude, use data centers based in the U.S. to store data and process requests via the cloud.

This has led to concern from politicians and regulators in Europe, who see dependence on U.S. technology as harmful to the continent’s competitiveness — and, more worryingly, technological resilience.

Where did ‘AI sovereignty’ come from?

The notion of data and technological sovereignty is something that has previously been on Europe’s agenda. It came about, in part, as a result of businesses reacting to new regulations.

The European Union’s General Data Protection Regulation, for example, requires companies to handle user data in a secure, compliant way that respects their right to privacy. High-profile cases in the EU have also raised doubts over whether data on European citizens can be transferred across borders safely.

The European Court of Justice in 2020 invalidated an EU-U.S. data-sharing framework, on the grounds that the pact did not afford the same level of protection as guaranteed within the EU by the General Data Protection Regulation (GDPR). Last year the EU-U.S. Data Privacy Framework was formed to ensure that data can flow safely between the EU and U.S.

These political development have ultimately resulted in a push toward localization of cloud infrastructure, where data is stored and processed for many online services.

Filippo Sanesi, global head of marketing and operations at OVHCloud, said the French cloud firm is seeing lots of demand for its European-located infrastructure, as they “understand the value of having their data in Europe, which are subject to European legislation.”

“As this concept of data sovereignty becomes more mature and people understand what it means, we see more and more companies understanding the importance of having your data locally and under a specific jurisdiction and governance,” Sanesi told CNBC. “We have a lot of data,” he added. “This data is sovereign in specific countries, under specific regulations.”

“Now, with this data, you can actually make products and services for AI, and those services should then be sovereign, should be controlled, deployed and developed locally by local talent for the local population or businesses.”

The AI sovereignty push hasn’t been driven forward by regulators — at least, not yet, according to Cisco’s Gow. Rather, it’s come from private companies, which are opening more data centers — facilities containing vast amounts of computing equipment to enable cloud-based AI tools — in Europe, he said.

Sovereign AI is “more driven by the industry naming it that, than it is from the policymakers’ side,” Gow said. “You don’t see the ‘AI sovereignty’ terminology used on the regulator side yet.”

Countries are pushing the idea of AI sovereignty because they recognize AI is “the future” and a “massively strategic technology,” Gow said.

Governments are focusing on boosting their domestic tech companies and ecosystems, as well as the all-important backend infrastructure that enables AI services.

“The AI workload uses 20 times the bandwidth of a traditional workload,” Gow said. It’s also about enabling the workforce, according to Gow, as firms need skilled workers to be successful.

Most important of all, however, is the data. “What you’re seeing is quite a few attempts from that side to think about training LLMs on localized data, in language,” Gow said.

‘Reflecting values’

In Italy, the first LLM trained specifically on the Italian language data, called Italia 9B, launched this summer.

The aim of the Italia project is to store results in a given jurisdiction and rely on data from citizens within that region so that results produced by the AI systems there are more grounded in local languages, culture and history.

“Sovereign AI is about reflecting the values of an organization or, equally, the country that you’re in and the values and the language,” David Hogan, EMEA head of enterprise sales for chipmaking giant Nvidia, told CNBC.

“The core challenge is that most of the frontier models today have been trained primarily on Western data generally,” Hogan added.

In Denmark for example, where Nvidia has a major presence, officials are concerned about vital services such as health care and telecoms being delivered by AI systems that aren’t “reflective” of local Danish culture and values, according to Hogan.

On Wednesday, Denmark laid out a landmark white paper outlining how companies can use AI in compliance with the incoming EU AI Act — the world’s first major AI law. The document is meant to serve as a blueprint for other EU nations to follow and adopt.

“If you’re in a European country that’s not one of the major language countries that’s spoken internationally, probably less than 2% of the data is trained on your language — let alone your culture,” Hogan said.

How regulation fueled a mindset shift

That’s not to say regulations haven’t proven an important factor in getting tech giants to think more about building localized AI infrastructure within Europe.

OVHCloud’s Sanesi said regulations like the EU’s GDPR catalyzed a lot of the interest in onshoring the processing of data in a given region.

The concept of AI sovereignty is also getting buy-in from local European tech firms.

Earlier this week, Berlin-headquartered search engine Ecosia and its Paris-based peer Qwant announced a joint venture to develop a European search index from scratch, aiming to serve improved French and German language results.

Meanwhile, French telecom operator Orange has said it’s in discussions with a number of foundational AI model companies about building a smartphone-based “sovereign AI” model for its customers that more accurately reflects their own language and culture.

“It wouldn’t make sense to build our own LLMs. So there’s a lot of discussion right now about, how do we partner with existing providers to make it more local and safer?” Bruno Zerbib, Orange’s chief technology officer, told CNBC.

“There are a lot of use cases where [AI data] can be processed locally [on a phone] instead of processed on the cloud,” Zerbib added. Orange hasn’t yet selected a partner for these sovereign AI model ambitions.

Technology

Citi backs stablecoin firm BVNK as Wall Street warms to crypto

Published

3 hours ago

October 9, 2025

admin

BVNK co-founders (L to R) Donald Jackson, Jesse Hemson-Struthers and Chris Harmes, at the company’s San Francisco Office.

BVNK

Citi has invested in stablecoin infrastructure company BVNK, the startup told CNBC on Thursday, as big U.S. banks ramp up their presence in the cryptocurrency and digital asset space.

Stablecoins are a type of digital asset pegged to a fiat currency and backed by real-world assets like bonds. The two biggest are USDC and Tether, which issues USDT.

BVNK’s core technology is effectively a payments rail to facilitate transactions in stablecoins globally, allowing customers to move money from fiat into the cryptocurrency and back.

The company declined to disclose the sum that Citi invested or its current valuation. But Chris Harmse, co-founder of BVNK, told CNBC in an interview that its valuation is higher than the $750 million that was publicly disclosed at its last funding round.

The investment was made by Citi Ventures, the venture capital arm of Citigroup.

Stablecoins, once just a tool for people to trade quickly in and out of other cryptocurrencies like bitcoin, are now being seen as a potential key tool for cross-border transactions due to the speed to send and receive them, the low cost and 24/7 settlement.

There were nearly $9 trillion worth of stablecoin transactions over the last 12 months, according to Visa, while the current valuation of all stablecoins in existence stands at over $300 billion, Coinmarketcap data shows.

U.S. growth

BVNK’s Harmse said the company is seeing momentum, especially in the U.S., which has been its fastest-growing market over the last 12-18 months thanks to what is seen by the crypto industry as a more favorable regulatory environment.

Earlier this year, the U.S. passed the GENIUS Act, a bill designed to regulate and bring more clarity to the stablecoin market.

“You are seeing with the GENIUS Act coming through, and regulatory clarity, an explosion of demand for building on top of stablecoin infrastructure,” Harmse told CNBC.

BVNK’s technology can be used by customers to pay suppliers, contractors or merchants in other countries. The company is looking to expand its customer base, including to digital-only banks or neobanks that may use stabelcoins for their core checking account, Harmse said.

Wall Street welcomes crypto

Citi isn’t alone in embracing digital assets when it comes to major U.S. banks and financial institutions.

JPMorgan Chase launched its own stablecoin-like token called JPMD this year. The bank also made the decision this year to allow clients to buy bitcoin.

Banks have been looking at how to use blockchain, a technology originally developed to underpin bitcoin, to lower the cost and speed up transactions of many kinds. Part of this involves “tokenization” which broadly means the idea of issuing a digital token that represents something such as a deposit.

Bank of New York Mellon, for example, is exploring tokenized deposits. HSBC has already launched a tokenized deposit service.

Visa’s stablecoin pilot could turn a narrative headwind into a tailwind, says Mizuho’s Dan Dolev

Technology

OpenAI expands budget-friendly ChatGPT Go to 16 more countries in Asia

Published

3 hours ago

October 9, 2025

admin

OpenAI expands budget-friendly ChatGPT Go to 16 more countries in Asia

OpenAI’s ChatGPT Go has expanded to a total of 18 countries across Asia, according to an announcement made yesterday.

Nurphoto | Nurphoto | Getty Images

OpenAI has expanded its lower-cost subscription plan, ChatGPT Go, to 16 more countries across Asia, company head Nick Turley announced Thursday.

“Making ChatGPT more affordable has been a key ask from users,” said Turley in a post on social media platform X in August.

The artificial intelligence company launched ChatGPT Go in India and Indonesia earlier this year.

The rollout brings OpenAI’s cheapest plan to users across a total of 18 Asian countries: Afghanistan, Bangladesh, Bhutan, Brunei Darussalam, Cambodia, India, Indonesia, Laos, Malaysia, Maldives, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Thailand, Timor-Leste (East Timor) and Vietnam.

The expansion aims to increase the accessibility of the company’s latest model GPT-5, OpenAI said on its website.

ChatGPT Go includes all features in the free version, as well as extended access to image generation, file uploads, advanced data analysis and other functions. It also includes higher usage limits than the free plan for core chat and tools, according to OpenAI.

Why Jefferies declared ChatGPT its winner of the battle of AI chatbots

ChatGPT Go launched in India and Indonesia at a monthly fee of 399 rupees (about $4.50) and 75,000 rupiah (about $4.53), respectively — which are a fraction of the price of the company’s other subscription plans. The cost of the plan in other Asian markets may differ.

OpenAI currently has two other paid personal plans: ChatGPT Plus, which is offered at $20 a month and ChatGPT Pro, which is offered at $200 a month. The company also offers a business plan for $25 a month.

The use of ChatGPT has grown rapidly across the globe since its launch in late 2022. According to data from OpenAI, adoption growth rates of the AI chatbot in the lowest income countries were over four times those in the highest income countries by May 2025.

OpenAI noted that the budget-friendly plan is gradually being made available to all users. For those in Cambodia, Laos and Nepal, ChatGPT Go is already available on web and Android subscriptions, but not yet in the iOS app.

Technology

AMD stock continues rally after OpenAI deal, now up 43% this week so far

Published

16 hours ago

October 8, 2025

admin

AMD stock continues rally after OpenAI deal, now up 43% this week so far

Lisa Su, chair and chief executive officer of Advanced Micro Devices Inc. (AMD), during a Bloomberg Television interview in San Francisco, California, US, on Monday, Oct. 6, 2025.

David Paul Morris | Bloomberg | Getty Images

AMD stock climbed 11% on Wednesday, continuing a massive run since OpenAI announced plans to buy billions of dollars of AI equipment from the chipmaker earlier this week.

On Monday, the ChatGPT maker entered into an agreement to potentially own 10% of AMD, based on its stock price and partnership milestones.

AMD now has a market cap of $380 billion after climbing 4% on Tuesday and 24% on Monday. Shares are up 43% so far this week, on pace for the best weekly gain since April 2016.

The partnership with OpenAI, which has historically been closely linked with Nvidia, has bolstered investor confidence that AMD will be a viable competitor to Nvidia in AI chips.