EU’s Cloud Vision Still Pie in the Sky

Supporters of an ambitious new project for a Europe-wide federated data infrastructure named Gaia-X held a conference earlier this month to lay out the plans for its development. The conference, held virtually, had statements from senior government officials, including the French Minister of the Economy and Finance Bruno Le Maire. It had sessions dedicated to C-level executives and engineers from all the major cloud providers eagerly pledging support for the project. It had presentations on the sector-specific implementations of Gaia-X, in financial services, automotive, healthcare and others.

The one thing it did not have was any actual, concrete details on how Gaia-X is going to work in practice.  

Gaia-X was initiated by the German and French governments, with a few day-one private sector supporters, including IBM and Deutsche Telekom. In October, it was opened to the rest of the EU membership. It arose from the sudden urgency around an old concept with a slippery meaning—data sovereignty; essentially, it is an attempt to wrest some share of innovation in artificial intelligence from China and the US, and to dilute reliance in the EU on the US- and China-based hyperscalers, like Alibaba, Amazon Web Services, and Google.

Supporters say Gaia-X is conceived as a decentralized cloud architecture based on openness and interoperability. As Le Maire put it during his address, “This platform will serve as the backbone of federated services and data-sharing tools, which will then allow cloud providers to propose solutions and to implement data spaces.” But even after having sat through a two-day conference of speeches and presentations, I can’t say that there seems to be more to it than high-level ambitions, at least at this point.

Virginie O’Shea, CEO of Firebrand Research, who also attended the conference, was also left with more questions than answers. “We need to understand the interoperability elements—how are they going to achieve that? Who is setting the standards for this work? What kind of governance structure will be in place across the various federated entities? What will the initial use-case be? How will they phase it? Who will oversee the governing body? Where will it be located? France? Germany? Honestly, there are so many questions at this point, and we have very few answers,” she says.

Even on the level of sector-specific implementations of Gaia-X, there wasn’t a lot of detail to come out of the conference.

Olivier Sichel, deputy CEO of the Caisse Des Depots et Consignations, the investment arm of the French government, presented on the financial services aspect of Gaia-X. He said “finance Gaia-X” would be underpinned by a platform called the Financial Big Data Cluster (FBDC), whose sponsors include Deutsche Börse, and members include BNP Paribas, Credit Agricole, and Deutsche Bank. These organizations and others have contributed to working groups on the overall expectations of Gaia-X, which is “by itself, a powerful symbol of our willingness to make Gaia-X happen for real,” Sichel said.

According to its website, the FBDC will “integrate the previously unconnected financial data of companies, authorities, and science in a common data pool, and will be optimized for the development of artificial intelligence applications and systems.” Data will be stored in a “secure data vault” that will allow access to data by users in gradations according to their sensitivity, as well as analytics and computing capacity.  

“Thanks to the Gaia-X strategy of aggregating and federating data and services, we will easily build, assemble and use trusted services,” Sichel said, adding that Gaia-X will help open innovation and co-construction in a compliant and secure ecosystem, to create financial products that comply with regulation and fit in with European values.

Sichel said Gaia-X will offer new opportunities for a more intensive use of AI and data-sharing, which could help in fraud management, terrorism reporting, and anti-money laundering capabilities. It could accelerate the development of new products that improve monetary policy, the oversight of stock exchanges, and enhance market integrity by detecting manipulation with new AI methods.

And, of course, the recitation of these grand plans would not be complete without a hat tip to blockchain technology. “Another interesting topic [under consideration] is to enhance federation services with tokenization services that could help orchestrate secured data in order to facilitate invoicing or usage-based services. … There are blockchain-as-a-service platforms that could help secure shared data and smart contracts, and in general provide trusted hosting for blockchain nodes,” Sichel said.

The use cases that Sichel mentioned are certainly seductive—who wouldn’t like to access new AI tools for anti-money laundering processes, for instance, which don’t generate revenue and just represent serious risk? But, again, how this is going to be achieved in Gaia-X was not clear from Sichel’s presentation.

O’Shea says the finance Gaia-X seems to be “some sort of pan-European shared services cloud-based architecture that will be endorsed by national regulators and governments for use within the sector. The federated concept seems to imply it will be national entities operating interoperable cloud environments rather than one big cloud provider. But the details remain pretty vague.”

Supplying a data infrastructure across borders and to all industries, as well as to private individuals; allowing secure access to data, with authentication and access controls in place—well, that seems to me like a rather large undertaking on which to embark without having the rails in place.

It’s possible, of course, that there are more concrete plans in development than were made public at the conference, and there were hints here and there of activity taking place behind the scenes, mentions of working groups and position papers, and solutions providers are coming out with products that they say will fit in with Gaia-X.

But I suspect that the EU is setting itself up for an expensive white elephant. The European Commission and EU governments involved have pledged to support Gaia-X, which “means investment on a huge scale to get this off the ground,” as O’Shea puts it, and explains the eagerness of the major cloud providers to be involved with the project.

Without a concrete plan, Gaia-X might benefit no one but—ironically enough—the America- and China-based hyperscalers.