I’ve been in London for the last month and have heard policymakers react to the wake up call Elon Musk just delivered.
The decision of the U.S. to shut off intelligence and throttle the military version of Starlink called Starshield to Ukraine may have been a blip in the news in the US, but it has sent tremors across Europe.
For years doomsayers in the UK and Europe were worried about the U.S. having a kill switch in weapon systems and critical commercial technology that could disconnect them at will. Most people, including me, thought that it was a paranoid fantasy.
Until it happened. Seemingly on a whim of a single individual, (according to the Wall Street Journal) Elon Musk personally ordered the restrictions, and the effect was to tilt Russia’s war against Ukraine in favor of the Russians. This wasn’t an articulated U.S. foreign policy nor was it an announced act of the U.S. government. From news accounts it appears to have been a personal decision of an American CEO acting unilaterally.
Blowback
For whatever reason, whether it was to satisfy a request from the White House or some personal animosity to the Ukrainians, from Europe’s perspective, that’s almost beside the point. An American company operating critical military infrastructure was able to degrade the capability of an American partner in the middle of a war. Without warning.
The message heard loud and clear here in Europe was that the U.S. is an unreliable security and technology partner willing to throw any partner under the bus, at any time, for any reason.
The conversations I’ve heard have included, “what happens if other U.S. CEOs – Microsoft, OpenAI or Anthropic, Oracle, Palantir, or Google – decide to restrict/limit or deny access to their products? What capabilities would Europe lose if enterprise software and/or AI across Europe goes dark?” This was a laughable scenario until this week. To a lot of European decision makers, it is no longer outside the realm of possibility.
The lesson that was brought home was that no nation, Europe or elsewhere, can continue to outsource its national sovereignty and security by depending solely on US data systems or intelligence.
Unintended Consequences
Besides the political ramifications, the business ones are going to come home to roost. If every U.S. vendor is now a kill-switch risk, the allied market for that whole ecosystem shrinks. As it sinks into the European countries that the U.S, can simply shut off any technology, over time they will find and build alternatives. In the years ahead, this may cost American companies tens if not hundreds of billions of lost revenue.
Europe has been debating digital sovereignty for years. Up to this year, the idea of cloning the capabilities of the best U.S. products seemed like an insurmountable problem. And some, like low-cost access to space, still are. But today AI collapses the cost of creating sovereign software at exactly the time that geopolitical risk is increasing customers’ willingness to switch. AI makes recreating the features, functions and compatibility of Microsoft Office, Oracle, Salesforce, Palantir, Anduril, et al. within reach. AI puts it well within the capabilities of most nations.
The U.S. spent decades establishing itself as the world’s indispensable technology supplier. A substantial part of that advantage depended on customers believing American technology would remain reliable and available.
Going forward a U.S. founder selling into European defense or government now needs an answer to “who holds the switch” before the first meeting; and European founders just got sovereignty as a sellable feature.
What was done in a fit of pique will cost the U.S. both leadership and jobs.