The EU is all talk: lately they keep saying they don’t want to fall behind the US and China, but then they turn around and suck up to the US on chips.
On June 1, reports emerged that the EU is about to officially join the US-led “Silicon Peace” (Pax Silica) initiative.
Basically, it’s the US’s inner circle for artificial intelligence (AI), designed to coordinate AI chip supply chains and export controls to counter China’s dominance in critical minerals and slow down its tech rise. The EU was worried it might lose some regulatory control, but after weeks of debate, they jumped in anyway.
The US kicked off this initiative last December. So far, the UK, Japan, South Korea, India, and Australia are in, along with three EU countries: Greece, Finland, and Sweden.
Not everyone in Europe is happy. France has been the biggest critic, saying this alliance would basically colonize Europe and undermine the EU’s goal of tech independence from foreign suppliers, including the US.
Last December, the US and representatives from multiple countries launched the “Silicon Peace” initiative.
Still, EU reps are set to give the green light this Wednesday (the 3rd). Then the EU will buy at least $40 billion worth of US AI chips under the deal. After talking with the US State Department, the EU Commission confirmed the declaration is just a political statement, not legally binding, and won’t mess with EU decision-making.
On the same day, the EU will also roll out a bunch of measures to boost tech independence, like buying more European-made chips and keeping sensitive government cloud apps hosted inside Europe.
Reports say US giants like Nvidia dominate the design of advanced AI chips for the latest systems. Europe, through Dutch company ASML, dominates the equipment that makes those chips, holding a critical choke point in the supply chain.
The EU Commission thinks getting all member states to join together will help coordinate tech supply chains with allies and open doors for European firms. Plus, in recent weeks, some EU countries have already joined on their own, putting more pressure on the bloc.
Jacob Helberg, Undersecretary for Economic Affairs at the US State Department.
Reports say Germany, Italy, and the Netherlands are all for it, emphasizing that the EU needs to show a united front to the US.
France and a few others, on the other hand, wanted more clarity on how the initiative would be run, how it connects to the G7, and whether it would mess with the EU’s own rules on exports and foreign investment.
Separate reports indicated that in early May, the EU Commission was already planning to send top officials to the US to hash out joining the “Silicon Peace” alliance. At the same time, EU officials are discussing with France what conditions need to be met and what clarifications are needed.
But it’s not a done deal yet. The approval on the 3rd is just the first step; then ministers have to sign off, which could happen as early as next week.
Both Biden and Trump have slapped on chip export restrictions to hold China back, and they keep getting tougher. The US has also been rounding up allies to gang up on China.
On May 31, the US Commerce Department moved to plug a so-called “loophole” that has been around for a year. The loophole supposedly let companies ship cutting-edge chips—like Nvidia’s Rubin and Blackwell, and AMD’s MI350x—to Chinese entities based outside China.
But it’s backfired. Chinese companies have been speeding up their own development, especially in high-end AI chips, and making real progress.
China has been clear about its stance on US chip sales. A Chinese foreign ministry spokesperson pointed out that the “small yard, high fence” approach won’t hold back China’s innovation and actually hurts the whole industry, including US companies. The US should stick to fair competition and let companies compete to advance tech.
