French sovereignty requires greater involvement from the government and its institutions, at every level. That is the price, and the only price, at which we will be able to protect our finest technology gems and prevent our assets from being exploited by others.
When it comes to technological sovereignty, we must acknowledge that France today faces a certain contradiction. On the one hand, French companies are asked to comply with very strict rules (GDPR, NIS2, SecNumCloud...), which has a significant cost impact for them. On the other, a health data warehouse called EMC2, based on the automated processing of personal data, is hosted on Microsoft's Azure cloud for a period of three years, thereby breaching the most basic rules for protecting the personal data of French citizens, given the Cloud Act...
"Before Microsoft's infrastructure is up and running, it is well-known American players that will serve the Redmond firm's interests. The American economy will, once again, operate in a closed loop"
We could also mention the opening of Google's AI campuses so that French start-ups can adopt the American giant's artificial intelligence technologies. And looking at the Choose France initiative, Microsoft's announcement that it intends to invest €4 billion in France to expand its cloud and AI infrastructure has made more than one observer smile.
"It is indeed legitimate to ask what the real benefits of this investment will be for the French digital economy. Before Microsoft's infrastructure is up and running, it is well-known American players that will serve the Redmond firm's interests. The American economy will, once again, operate in a closed loop," says Damien Desanti, Founder and head of PHOCEA DC.
Public procurement, the linchpin of sovereignty
"If there is a technology gap between Azure and our offerings, let's fund French research and innovation and close that 'gap' in the short term!"
French digital players, including PHOCEA DC, would prefer the French government to make radically different choices. They expect France's leaders to make the government the leading customer of French digital companies.
"The amounts the government spends to host French citizens' health data in Azure are very large. We believe this money could be invested in the French digital economy. Admittedly, Azure offers all the technology building blocks needed for such hosting, while the French ecosystem may not master all of them. We are aware of this, but we are convinced that a French equivalent could be brought to market very quickly through public procurement directed toward our country's start-ups. If there is a technology gap between Azure and our offerings, let's fund French research and innovation and close that 'gap' in the short term!" comments Damien Desanti.
Americans understood the virtues of public procurement a very long time ago, and the US government is today the leading contributor to Silicon Valley start-ups. French programs such as the Research Tax Credit (CIR) and the Innovation Tax Credit (CII) must be used to finance the missing stages of companies that want to grow in France and become national champions.
Embracing assertive, long-term protectionism
"To keep our European champions, we have to be able to retain ownership. And the government has a crucial role to play here. The next 10, 20 or 30 years are being decided right now"
Another wish related to sovereignty: stronger involvement of French institutions (Banque des territoires, Caisse des Dépôts, BPIFrance...) in what could be called an "assertive protectionism" approach toward our "gem" companies.
"These institutions must take more stakes in our national champions to prevent them from falling, for billions of dollars, into the hands of foreign players. There is no point in financing the growth of these companies, which become leaders in their market, only to see them accept investment from the highest bidder after a few years in business. 'Protectionism' must be designed and embraced for the long term," notes Damien Desanti.
The commercial partnership signed last February between Mistral AI and Microsoft is symptomatic of this trend. The partnership includes a €15 million investment in Mistral AI by Microsoft, an investment that could be converted into equity during the French LLM specialist's next funding round.
Another avenue to explore: the possibility of favorable taxation or subsidies for companies whose capital remains more than 50% owned by French shareholders. This type of measure would be a strong incentive for founders and their investors.
"To keep our European champions, we have to be able to retain ownership. And the government has a crucial role to play here. The next 10, 20 or 30 years are being decided right now. We risk losing our sovereignty even though France is the only country in the world with two internet hubs (Paris and Marseille) in the global top 10. What's more, thanks to its nuclear fleet, France has one of the lowest electricity costs in the world. We must protect these two major assets and make full use of them," observes Damien Desanti.
The head of PHOCEA DC concludes: "The strategic choices made after the war to build a strong, sovereign nuclear and aerospace industry must be repeated today for the digital sector, and more specifically for data centers. We are at a crossroads and the government must rise to the occasion."
