Europe’s leverage of ASML’s AI dominance strengthens its push for strategic autonomy and challenges US export controls.
President Donald Trump’s second term has brought about radical change in domestic and foreign policy. However, one thing has remained constant across party lines: the American desire to win the artificial intelligence (AI) race. The race has become a national priority in the United States, with Secretary of the Interior Doug Burgum even warning that the threat of losing the AI arms race is existential. This comes at the same time as President Trump’s barrage of tariffs, which have strained relations with key allies, including the European Union (EU). Most countries lack the leverage to fight back, and even the EU, which previously reached a trade deal with President Trump, was criticized for capitulating to him. Recently, however, Dutch photolithography titan, ASML Holding, has shown a willingness to invest in the European AI industry, which could become indispensable leverage for the EU in future negotiations.
ASML: The Linchpin of the AI Boom
ASML is a behemoth in the tech world and the linchpin of the AI boom. It is the world’s sole supplier of extreme ultraviolet (EUV) lithography machines, which have been described as the “most complicated machine humans have built.” These lithography machines are necessary for manufacturing the most advanced semiconductor chips. ASML has supplied Taiwan Semiconductor Manufacturing Company (TSMC), Intel, and Samsung, among others. Being the only company in the world that can produce EUV lithography machines, ASML has become the European Union’s (EU) most valuable player in the AI race.
Washington recognizes the importance of ASML’s monopoly and has consistently leveraged it. Over the past few years, the United States has lobbied the Dutch government to implement export controls on ASML equipment, cutting off China’s access to ASML’s most advanced technologies. Notably, in 2019, the Trump administration pressured the Netherlands to revoke an export license for ASML’s most advanced lithography machine, intended for delivery to China. The $150 million machine was never delivered. More recently, the Netherlands aligned with pre-existing American export controls by expanding its own restrictions to cover deep ultraviolet (DUV) lithography machines. These machines are slightly older, but still vital for less complicated semiconductors, and act as ASML’s “cash-cow.” By late 2023, the United States unilaterally imposed rules banning ASML from shipping certain tools that contained any American components, leading Dutch government officials to publicly raise concerns about sovereignty. ASML has effectively become leverage for the United States’ tech standoff with Beijing.
China’s Push for AI Leadership
China is no idle threat either. According to Victor Shih, an expert in the Chinese political system, “AI […] is one of the higher priorities for Xi Jinping.” Despite China facing a government debt crisis, Shih believes that funding for AI will continue, “even if they can’t do anything else.” President Xi has put one of his most trusted allies, Ding Xuexiang, in charge of leading China’s AI efforts, further underscoring the importance that Beijing places on developing the technology.
Europe Seeks Strategic Autonomy
Now, the EU has the opportunity to flip the script. If ASML can be weaponized, as it has been, to serve Washington’s strategic aims with China, it can also become leverage for Brussels in transatlantic negotiations. Indeed, despite being a Dutch company, ASML relies on the United States for several of its components, and it’s this very reliance that has allowed the United States to use the Foreign Direct Product Rule and impose export controls on ASML products. However, there are signs of a shift. ASML has already started to reduce its dependence on American technology, aligning with the EU’s goal of strategic autonomy. Earlier this month, ASML announced a major investment in Mistral, France’s flagship AI startup. The Dutch firm invested $1.5 billion in Mistral, becoming the company’s largest shareholder. The deal was widely seen by policymakers as a move that strengthens European ‘digital sovereignty.’ In a sector dominated by American tech giants, ASML’s Mistral investment represents a growing realization from Europe: cooperation within the bloc is necessary for the EU to stay competitive in the AI race. According to the joint statement, Mistral’s technology will be used to boost the development and operations of ASML’s systems. The two companies will also engage in joint research.
Politically, the timing is hard to ignore. The partnership arrives just as Europe’s tech relations with Washington were going sour. The deal, according to Sten Tamkivi, a European venture capitalist, “reflects the mindset shift taking place across Europe.” He further added that there is a newfound willingness to make better use of Europe’s own “hard assets to strengthen our sovereignty.” Put simply, through strategic investments, Europe is working towards a world in which it can leverage its strengths like ASML, instead of being reliant on and subject to American export controls. The investment is a proof of concept that the EU can serve its own interests in the AI race, something that was once doubted.
This is not to suggest that the EU will start wielding ASML’s monopoly in an overtly confrontational way. Europe has much to gain from a cooperative relationship with the United States, and ASML’s business with American companies is immensely important for the company. But the undertones are clear: Europe will not continue to capitulate to any and all American demands.
Europe Shaping the Future of the AI Race
President Trump’s urgent desire for AI supremacy, coupled with his hostile attitude towards even close allies like the EU, has convinced Europe to hedge against American unreliability. Now, with ASML leading the way, Brussels may soon find itself not just reacting to Washington’s demands but shaping the terms of the AI race itself.
About the Author: Savar Suri
Savar Suri is an Émile Boutmy Scholar at Sciences Po Paris. He has previously worked with the Anwar Gargash Diplomatic Academy in Abu Dhabi.
Image: Poetra.RH/shutterstock
