A new report from the Center for Strategic and International Studies (CSIS), published October 20, 2026, reframes the US-China technology rivalry around a question Washington has mostly avoided: whether America can actually win it alone. The analysis, titled “Why the United States Needs Europe in Order to Win the Technology Race,” argues the answer is no, and that the coding tools, cloud platforms, and AI developer ecosystems built and sold by American companies depend on European engineers, capital, and customers in ways the policy conversation rarely acknowledges.
The report, authored by Federico Steinberg and Riccardo Bosticco, lands at a moment when GitHub Copilot, Cursor, Mistral AI’s coding models, and a dozen other developer-tooling platforms are fighting for market share across the Atlantic. Its core claim: the United States and China are each trying to lock in third countries to sustain their respective technological advantages, and Europe is the biggest prize neither side can take for granted.
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CSIS Report Puts the Transatlantic Tech Alliance Back in the Spotlight
Steinberg and Bosticco’s analysis does not treat Europe as a passive market waiting to buy whatever Silicon Valley ships next. Instead, the report frames Europe as a coproducer of American technology, embedded in the supply chains, developer talent pools, and regulatory frameworks that determine whether US software companies can scale globally. That framing matters directly for the coding-tools sector, where companies like GitHub (owned by Microsoft), Cursor, and JetBrains depend on European developer adoption to claim the market-share numbers they tout in earnings calls.
The report’s timing is notable. It arrives as US-based AI coding platforms are locked in an intense scramble for enterprise developer seats, a competition covered in detail following GitHub Copilot’s recent four-model expansion to counter Cursor’s growth. If Steinberg and Bosticco are right that European demand underwrites American technology dominance, then every enterprise contract GitHub, Cursor, or OpenAI’s coding tools sign in Berlin, Paris, or Amsterdam is not a bonus data point. It is part of the foundation.
According to the CSIS report, the United States and China are each competing for technological superiority, and third countries are important to sustaining each side’s advantages. That is a more nuanced argument than the usual zero-sum framing of the AI race. It suggests the real contest is not just chips and model benchmarks, but which bloc can keep allied countries, developers, and enterprises inside its technology stack.
Inside the CSIS Argument: Why America Can’t Go It Alone
The CSIS analysis identifies Europe as holding a key role in the broader US-China technology rivalry, not as a junior partner but as a region whose decisions about which tech stack to build on will shape the outcome. That is a notable shift in tone from a Washington policy community that has, for years, treated European regulation (from GDPR to the AI Act) primarily as friction to be managed rather than leverage to be respected.
For the coding-tools and developer-platform industry specifically, the stakes are concrete. Every European enterprise that standardizes its software development lifecycle around GitHub Copilot, Cursor, Codex, or Claude Code becomes part of the usage base, feedback loop, and revenue stream that lets American AI labs keep training and iterating at the pace the market now expects. Pull that base away, and the velocity advantage US coding-tool vendors currently enjoy over rivals narrows.
Reporting from Ars Technica on the broader dynamics of the US technology race has noted the tension between wanting to dominate a sector and actually wanting to sustain the infrastructure, investment, and demand required to do so. The CSIS report channels a version of that same tension into transatlantic policy: dominance without partnership, Steinberg and Bosticco argue, is not a stable strategy.
The âŽ3.6 Trillion Price Tag on European Tech Independence
The single most concrete figure in the CSIS report is also its most consequential: estimates cited in the analysis put the cost of Europe building its own full technology stack, independent of US providers, at âŽ3.6 trillion or more. That number functions as the report’s central argument in miniature. Decoupling from American cloud infrastructure, AI models, developer tools, and chip supply chains is not a matter of political will alone. It is a capital-allocation problem on a scale that dwarfs most single-country industrial policies in European history.
Put that figure next to the investments already flowing into European AI infrastructure and the gap becomes clearer. NVIDIA’s RAISE initiative, which the company has positioned as a partnership to support roughly 3 million European researchers, represents a meaningful but comparatively modest down payment next to a âŽ3.6 trillion full-stack rebuild, as detailed in our coverage of NVIDIA’s EU research partnership. The CSIS argument is essentially that Europe does not need to spend âŽ3.6 trillion to rebuild everything from scratch if it instead negotiates a stronger seat at the table inside the existing US-led stack.
That framing cuts directly against the instinct, visible across several EU policy circles, to treat “digital sovereignty” as synonymous with “build everything domestically.” The CSIS report does not dismiss sovereignty concerns, but it does argue that the economics of a from-scratch European stack, spanning cloud compute, foundation models, coding assistants, chip design, and developer platforms, make full independence prohibitively expensive compared to negotiated interdependence.
Coding Tools Are the New Front Line in the US-Europe Tech Relationship
Nowhere is the interdependence the CSIS report describes more visible than in AI-assisted coding. European developers have become one of the fastest-growing user segments for American AI coding platforms over the past year, even as European AI labs like Mistral AI push their own competing products. That dual dynamic, European developers simultaneously fueling US platform growth and building homegrown alternatives, is precisely the mutual dependence Steinberg and Bosticco describe.
Microsoft’s GitHub Copilot, Cursor, and Anthropic’s Claude Code all report significant European enterprise adoption, a dynamic that shows up clearly in comparative coverage such as the pricing and capability gap between Microsoft Copilot, Meta AI, and Mistral’s Le Chat. Mistral AI, based in Paris, has become Europe’s flagship counter-example: a homegrown AI company building developer-facing tools that compete directly with the American platforms the CSIS report says Europe still substantially depends on.
That competitive tension is not incidental to the CSIS argument, it is the argument. The report’s recommendation that the US pursue “greater European participation in the US technology ecosystem through government procurement, defense cooperation, and commercial partnerships” implicitly acknowledges that Europe has its own coding-tools and AI champions capable of credible competition. The question the report poses is whether Washington treats that European capability as a threat to route around, or as a partner to integrate.
The Two-Way Street: How US Tech Giants Depend on European Demand
One of the more pointed observations in the CSIS report is that European dependence on US technology is mirrored by US technology providers’ dependence on European demand. That is a structural claim with real consequences for how coding-tools companies plan their go-to-market strategy. A GitHub, a Cursor, or an OpenAI coding product cannot simply write off the European enterprise market as a regulatory headache; European seat licenses, cloud consumption, and enterprise contracts are baked into the revenue base that justifies continued US investment in model training and tooling development. That mutual dependence plays out concretely in cloud infrastructure pricing, an area where European enterprises have real leverage simply by choosing where to run their workloads, as the gap in GPU cloud pricing across providers, documented in our analysis of AWS, Azure, and GCP H100 pricing, shapes where European developer teams run AI coding assistants and training workloads.
The CSIS report’s language about Europe as both “a vast market and a coproducer of U.S. technology” captures this two-way relationship precisely. European engineers staff the research labs of American AI companies’ European offices. European universities train the talent pipeline for both American and European AI firms. European regulators, through frameworks like the EU AI Act, have already forced American companies to adapt products for global release, which in some cases, as with Apple’s recent Siri AI rollout decisions covered in our report on Apple’s EU exclusion for its newest Siri AI model, means European regulatory posture directly shapes what features ship where and when.
CEPA’s Tech Agenda 2030: 450 Million Consumers, $71.1 Billion Surplus
A related report from the Center for European Policy Analysis (CEPA), cited alongside the CSIS analysis, quantifies the stakes in blunter commercial terms. The CEPA report states that US companies have access to 450 million European consumers, and cites a US trade surplus in services with Europe of $71.1 billion. That surplus is not incidental background noise, it is a direct product of American software, cloud, and AI services selling into a European market that, per the CSIS figure, would cost over âŽ3.6 trillion for Europe to replace with domestic alternatives.
The CEPA Tech Agenda framing complements the CSIS recommendation almost perfectly: expand European participation in the US technology ecosystem rather than simply extracting value from a 450 million-person consumer base and a $71.1 billion surplus. For companies building AI coding assistants, that translates into a strategic choice between treating European enterprise customers purely as a revenue line, or building genuine co-development relationships, including European data residency options, European language and compliance tooling, and in some cases European equity participation in the platforms themselves.
Galileo, Ariane, Copernicus: Europe’s Cards on the Table
The CEPA report does not frame Europe as merely a market to be served. It identifies specific European capabilities relevant to transatlantic cooperation, naming the Galileo satellite positioning system, the Ariane launch vehicle program, and the Copernicus Earth observation constellation as assets Europe brings to any negotiated technology partnership, particularly in space-adjacent technology sectors that increasingly intersect with AI infrastructure, from satellite-linked data centers to orbital compute.
These three programs matter to the coding-tools and AI infrastructure conversation because space-based assets increasingly double as data infrastructure. Galileo’s positioning data feeds into countless software applications; Copernicus’s Earth observation data trains and validates AI models across climate, agriculture, and defense software; Ariane’s launch capacity underwrites European sovereignty over getting satellite hardware into orbit without depending on American or Chinese launch providers. None of these assets replace the AI model training infrastructure or developer tooling platforms where American companies currently lead, but they give Europe genuine negotiating leverage, and the CSIS report’s broader argument, that Washington should treat European capability as complementary rather than competitive, finds its clearest illustration in exactly this kind of asset.
What Industry Leaders Are Saying
The CSIS and CEPA reports land against a backdrop of public statements from AI and chip industry leaders that echo the same underlying tension between European dependence and European opportunity. Mistral AI co-founder and CEO Arthur Mensch has described his company’s strategy explicitly in terms of giving European developers independence from closed, opaque American model APIs. “We’re building a developer platform that enables developers to customize AI models, to make AI applications, that are differentiated, that are in their hands, in the sense that they can deploy the technology where they want to deploy it, so potentially not using public cloud services, that enable them to customize the models much more than what they can do today with general-purpose models behind closed opaque APIs,” Mensch said, according to an interview published by Time.
NVIDIA founder and CEO Jensen Huang has taken a different but complementary position, framing NVIDIA’s European investments as ecosystem-building rather than market capture. “The important thing for us is to recognise that Europe needs to build out the entire stack,” Huang said, as reported by RTL Today. In the same discussion, Huang added, “We’re helping Europe create the AI ecosystem,” a framing that aligns closely with the CSIS report’s recommendation that American companies pursue commercial partnerships rather than one-sided market extraction.
European AI investors Fabian Westerheide and Veronika Westerheide have pointed to the underlying strengths that make Europe a credible technology partner rather than a dependent client. “Europe has good researchers, strong founders, a resilient ecosystem, investors, and an industry that faces competitive pressure and therefore wants to take action. These are real strengths,” the pair said, according to commentary published by AI Berlin. That assessment lines up with the CSIS report’s core thesis: Europe is not a passive market to be won or lost, but an active participant whose researchers, founders, and capital base shape the outcome of the broader US-China technology competition.
OpenAI co-founder and CEO Sam Altman has framed the infrastructure stakes of the AI buildout in historical terms that apply directly to the transatlantic relationship the CSIS report describes. “I believe this will be at least as big as the internet, maybe bigger. For that to happen, investment in infrastructure is critical,” Altman said while testifying on AI competition, according to a hearing broadcast by PBS NewsHour. If Altman’s internet-scale comparison holds, the CSIS report’s argument implies that infrastructure investment on that scale cannot realistically exclude European capital, European data centers, and European developer talent.
Market Impact: Who Wins and Who Loses in the Developer Tooling Economy
For the coding-tools and AI developer-platform sector, the CSIS report’s recommendations carry direct market implications. Companies that have already built European-facing infrastructure, European data residency, European language support, European compliance certifications, stand to benefit most from a policy shift toward “greater European participation” in the US technology ecosystem. That favors established players like Microsoft (through GitHub Copilot and Azure), which has had years to build out European operations, over smaller, US-only coding-tool startups still treating Europe as a secondary market. It also creates an opening for Mistral AI and other European AI developer-tooling companies to position themselves not as alternatives to the American stack, but as the natural on-ramp for the kind of “government procurement, defense cooperation, and commercial partnerships” the CSIS report recommends.
The report’s logic also has implications for cloud infrastructure providers whose pricing and availability shape where European developer teams run AI coding workloads. As detailed in our coverage of the ongoing price war among AWS, Azure, and Google Cloud GPU pricing, European enterprises increasingly shop across providers for AI training and inference costs, and that price sensitivity gives European customers real negotiating leverage, exactly the kind of leverage the CSIS report suggests Washington should treat as an asset rather than an inconvenience.
US vs Europe vs China: Three Models for the Technology Race
The CSIS report’s framing implicitly sets up a three-way comparison of strategic postures in the global technology race. The United States has built the deepest AI model and coding-tools ecosystem, anchored by companies including OpenAI, Anthropic, Microsoft, and Google, but according to the report, that ecosystem’s continued dominance depends on sustained access to European talent, capital, and consumer demand. China, meanwhile, is pursuing a more state-directed approach to building parallel AI and chip infrastructure, aiming for self-sufficiency rather than alliance-based growth. Europe occupies the middle position: too large and too technically capable to simply adopt either the American or Chinese stack wholesale, but, per the CSIS âŽ3.6 trillion estimate, too expensive to go fully independent either.
| Dimension | United States | Europe |
|---|---|---|
| Core advantage cited | Leading AI models, coding-tools platforms, cloud hyperscalers | 450 million-consumer market; Galileo, Ariane, Copernicus capabilities |
| Cost of full independence | Not addressed in the report | âŽ3.6 trillion or more, per estimates cited by CSIS |
| Trade relationship cited | $71.1 billion services trade surplus with Europe, per CEPA | Access to US cloud, AI, and coding-tools ecosystem |
| CSIS-recommended path | Expand European participation via procurement, defense, commercial deals | Negotiate deeper integration rather than full stack replacement |
| Reports supporting the analysis | CSIS (Steinberg and Bosticco), CEPA Tech Agenda 2030 | CSIS (Steinberg and Bosticco), CEPA Tech Agenda 2030 |
That middle position is precisely why the CSIS report treats Europe as the decisive variable rather than a fixed quantity. A Europe that drifts toward Chinese technology partnerships would materially change the resource base available to Chinese AI development; a Europe fully integrated into the American stack extends US technological reach without Washington funding the buildout alone.
Historical Context: Allies Have Always Been Part of America’s Tech Edge
The CSIS report’s call for the US to lean on allied partnership rather than go it alone fits a pattern with deep roots in US technology strategy, from Cold War-era semiconductor supply chains built across Japan, Taiwan, and Western Europe, to the Internet-era standards bodies that deliberately kept European and American institutions co-governing protocols that underpin modern software. The current moment differs mainly in speed and stakes: AI coding tools and foundation models are scaling and monetizing at a pace that leaves far less time for the kind of multi-decade alliance-building that characterized earlier technology eras, since the compounding advantages of AI (more usage generates more training data, which generates better models, which attracts more usage) make the speed of alliance formation itself a competitive variable.
Procurement, Defense, and Commercial Partnerships: The CSIS Prescription
The CSIS report’s specific policy recommendation centers on three channels: government procurement, defense cooperation, and commercial partnerships. Government procurement is perhaps the most immediately actionable lever for the coding-tools and software sector, since European government agencies are significant software buyers, and procurement rules favoring joint US-European development, rather than purely American or purely domestic European vendors, could reshape how companies like GitHub, Cursor, and Mistral AI compete for public-sector contracts.
Defense cooperation carries its own software implications, particularly as AI coding assistants increasingly get deployed inside defense-adjacent software development pipelines where European and American firms already collaborate on hardware procurement. Commercial partnerships, the third channel, is where the report’s logic most directly parallels existing dynamics documented in NVIDIA’s recent investments in French AI startups including Doctolib and Genesis AI, a model of American capital backing European technology companies rather than simply selling into the European market. The report does not specify which channel Washington should prioritize, but it frames all three as more cost-effective than either full American self-reliance or forcing Europe toward the âŽ3.6 trillion full-stack-replacement scenario.
What This Means for Software Developers and Coding Tool Vendors
For individual software developers and the companies building AI coding tools, the CSIS report’s recommendations translate into a few practical signals worth tracking. Expect continued, and possibly accelerating, investment by American coding-tools vendors in European data residency, European-language model support, and European compliance certifications, since the report frames European enterprise trust as a strategic asset rather than a regulatory cost center. Expect European AI companies, Mistral AI chief among them, to lean harder into the “sovereign but interoperable” positioning that lets them sell to both European public-sector buyers wary of American dependency and private enterprises that want European deployment options without fully abandoning US-built platforms, a strategy already shaping product decisions documented in comparisons like Microsoft Copilot versus Meta AI versus Mistral’s Le Chat.
The CSIS report’s framing also adds geopolitical weight to decisions that might otherwise look like purely technical infrastructure choices, including where AI training and inference workloads get hosted. As recent coverage of a federal ban on DeepSeek opening market share for rival AI vendors has shown, government policy toward specific AI providers can reshape the competitive landscape quickly. A similar dynamic could apply to transatlantic coding-tools policy if Washington moves to formalize the kind of European-participation framework CSIS recommends.
Five Predictions for the Next Phase of the Transatlantic Tech Race
Based on the trajectory the CSIS and CEPA reports describe, several developments look likely over the coming months, though none of these should be read as confirmed outcomes, only as reasoned extrapolations from the reports’ own logic.
- Expect louder European sovereignty debates inside coding-tools procurement. European government agencies and large enterprises will likely face internal pressure to weigh American AI coding platforms against European alternatives like Mistral AI’s developer tools, especially in public-sector contracts.
- Expect more US-Europe commercial partnership announcements in AI infrastructure. Following the pattern of NVIDIA’s RAISE initiative and its investments in French AI startups, more American AI and chip companies are likely to announce European research or investment partnerships framed explicitly around the kind of “coproduction” language the CSIS report uses.
- Expect continued friction over EU AI Act compliance and US product rollouts. As with Apple’s decision to exclude the EU from its newest Siri AI model at launch, American AI companies will likely continue staggering European releases, even as the CSIS report argues this undermines the mutual dependence both sides rely on.
- Expect the âŽ3.6 trillion figure to become a recurring reference point in European policy debates. Numbers of that scale tend to anchor subsequent negotiations, and expect European officials skeptical of full “digital sovereignty” to cite the CSIS estimate as evidence that negotiated interdependence is more realistic than full independence.
- Expect coding-tools vendors to compete more explicitly on “sovereignty-friendly” features. Expect more American AI coding platforms to market European data residency, audit transparency, and European-hosted inference options as competitive differentiators, directly responding to the dependency concerns the CSIS report describes.
Why This Debate Matters Beyond Washington and Brussels
The CSIS report’s framing has implications well beyond the policy circles where it was published. For the global coding-tools and AI developer-platform market, the outcome of this US-Europe negotiation will shape which companies get preferential access to European enterprise and government contracts, and whether European developers continue defaulting to American platforms or increasingly route around them toward homegrown alternatives.
Reporting from Deutsche Welle (DW) on the EU’s broader push toward “sovereign, trusted AI” underscores that Brussels is not waiting passively for Washington’s next move, describing European officials positioning homegrown AI capabilities as both a competitive necessity and a hedge against the kind of dependency the CSIS report describes. Coverage from the Italian outlet EUnews on the EU’s efforts to close the AI computing-power gap with the US and China adds that European policymakers increasingly treat compute capacity, not just model capability, as the critical bottleneck. Both threads reinforce the CSIS report’s central tension: Europe has genuine leverage, but converting it into a stronger negotiated position requires resources and coordination still very much in progress.
The Numbers Anchoring the Transatlantic Tech Debate
Strip away the geopolitical framing, and the practical negotiation underway between Washington and Brussels maps onto a small set of figures that the coding-tools and AI industry can read like a term sheet. The table below collects the key quantitative claims from the CSIS and CEPA reports that anchor that negotiation.
| Metric | Figure | Source |
|---|---|---|
| Cost of Europe building an independent tech stack | âŽ3.6 trillion or more | Estimates cited in the CSIS report |
| European consumer market accessible to US companies | 450 million consumers | CEPA Tech Agenda 2030 |
| US trade surplus in services with Europe | $71.1 billion | CEPA Tech Agenda 2030 |
| Key European space/tech assets cited | Galileo, Ariane, Copernicus | CEPA Tech Agenda 2030 |
| CSIS report publication date | October 20, 2026 | Center for Strategic and International Studies |
Frequently Asked Questions
What is the CSIS report about?
The report, titled “Why the United States Needs Europe in Order to Win the Technology Race,” was published by the Center for Strategic and International Studies on October 20, 2026, and authored by Federico Steinberg and Riccardo Bosticco. It argues that the United States cannot sustain its technological edge over China without deeper partnership with Europe.
How much would it cost Europe to build its own independent tech stack?
Estimates cited in the CSIS report put that cost at âŽ3.6 trillion or more, covering the full range of cloud infrastructure, AI models, chips, and software platforms Europe currently relies on US providers for.
What does the report recommend the US do?
The CSIS report recommends greater European participation in the US technology ecosystem through three channels: government procurement, defense cooperation, and commercial partnerships, rather than treating Europe purely as a market to sell into.
What is the CEPA Tech Agenda 2030 report, and how does it relate to the CSIS analysis?
The Center for European Policy Analysis (CEPA) published a related report, the Tech Agenda 2030, which quantifies US companies’ access to 450 million European consumers and a $71.1 billion US services trade surplus with Europe. It complements the CSIS report’s argument by detailing the existing commercial relationship at stake.
Why do coding tools and AI developer platforms matter to this debate?
American coding-tools companies, including GitHub Copilot, Cursor, and various AI model providers, depend heavily on European enterprise adoption and developer usage to sustain the revenue and usage data that fund continued AI model development, making the developer-tooling sector one of the clearest real-world examples of the mutual dependence the CSIS report describes.
What European assets does the CEPA report highlight as relevant to tech cooperation?
The CEPA report names Galileo (satellite positioning), Ariane (launch vehicles), and Copernicus (Earth observation) as European capabilities with direct relevance to transatlantic space and technology cooperation.
Is Europe likely to fully decouple from US technology providers?
The CSIS report’s own figures argue against that outcome being economically rational in the near term, given the âŽ3.6 trillion estimated cost of full independence. The more likely path, according to the report’s recommendations, is negotiated deeper integration rather than separation.
How does this affect everyday software developers?
Developers using AI coding assistants in Europe should expect continued investment by American vendors in European data residency, compliance, and language support, alongside growing competition from European alternatives like Mistral AI, as both sides respond to the dynamics the CSIS report describes.
