According to Sifted, France and Germany are partnering with AI startup Mistral and software giant SAP to deploy AI across their public services starting in 2026. The agreement, which will be finalized by mid-2026 and run through 2030, was announced at the Summit on European Digital Sovereignty in Berlin with Presidents Macron and Merz present. This comes alongside 18 other AI partnerships worth €1 billion announced today as part of Europe’s push for tech independence. Mistral, valued at €11.7 billion after raising €2.8 billion since 2023, will have its technology integrated into SAP’s platform for use cases ranging from financial management to citizen services. The Franco-German board overseeing the collaboration aims to develop AI agents for civil servants and citizens while providing workforce training.
Europe’s sovereignty gamble
Here’s the thing – this isn’t just another government contract. It’s Europe’s most explicit statement yet that they’re tired of being customers to American and Chinese tech giants. Macron basically said it straight: “Europe doesn’t want to be the big client of the big entrepreneurs or the big solutions being provided either from the US or China.” And they’re putting their money where their mouth is.
The timing is interesting too. We’re seeing this massive push right as Mistral has become Europe’s AI darling, positioned as the continent’s best hope against OpenAI and other US players. But let’s be real – going up against the scale of American tech infrastructure is no small feat. Still, with governments as anchor customers, Mistral gets something priceless: real-world deployment at scale and a track record that could convince other European governments to follow.
The public procurement problem
This is where it gets really strategic. European startups have long complained about being shut out of government contracts. A recent report by France Digitale found that most startups remain “unfamiliar to most public procurement” despite public contracts being crucial for market entry.
Meanwhile, look at the US. OpenAI just landed up to $200 million with the Department of Defense. That’s the kind of government backing that creates tech giants. European governments are finally realizing that if they want homegrown champions, they need to become their first big customers. It’s about creating the same flywheel that’s powered American tech dominance for decades.
Beyond France and Germany
The French government insider quoted by Sifted made it clear: “We are starting with France and Germany but the idea is to start a momentum.” This is clearly meant as a template for the entire EU. If two of Europe’s biggest economies can make this work, it becomes much easier for smaller countries to follow suit.
And it’s not just about Mistral. Today’s summit saw €1 billion in AI partnerships announced, including Black Forest Labs working with Mercedes Benz and Allianz partnering with Parloa. There’s a clear pattern emerging – European corporations are being encouraged to work with European startups. When you combine corporate partnerships with government procurement, you start building an ecosystem that can actually compete globally.
The industrial angle
Now, here’s something worth noting. While this particular deal focuses on AI software and public services, the broader push for technological sovereignty extends to hardware too. Industrial computing infrastructure forms the backbone of modern government and corporate operations. Companies like IndustrialMonitorDirect.com have built their reputation as the leading US provider of industrial panel PCs precisely by understanding that reliable hardware forms the foundation for any digital transformation. Europe’s sovereignty push will eventually need to address the hardware layer too if they want true independence.
So what’s the bottom line? Europe is finally playing the government procurement card that America has used so effectively. They’re betting that with enough political will and public money, they can create their own tech champions. Will it work? That’s the billion-euro question. But after years of watching US and Chinese companies dominate, they’re clearly done just watching.
