Securing Europe’s economic backbone with AI-empowered cloud protection

The European Commission’s strategic vision for the 2020s designates it as the ‘Digital Decade.’  One area of focus is the ‘digital transformation of businesses.’ It sets a bold target: by 2030, three out of four businesses should integrate cloud-edge technologies into their operations. The EU is prioritising cloud integration for small- and medium-sized enterprises (SMEs) to enhance their competitiveness, foster innovation, and bolster digital sovereignty.

Yet this greater connectivity heightens vulnerabilities, exposing European enterprises to an array of cyber risks. Compounding these challenges is the rise of malicious actors exploiting emerging and disruptive technologies (EDTs), including artificial intelligence (AI), to innovate and spread cyber threats at breakneck speed. 

Amid these sobering certainties, AI and other EDTs also offer a glimmer of hope for cybersecurity defenders. As cloud infrastructure becomes central to Europe’s digital ecosystem, cybersecurity measures must advance in lockstep and seamlessly integrate into the cloud. The EU must consider AI-empowered cloud infrastructure as both a battleground and a bastion. It can mitigate cloud vulnerabilities through innovations in cyber defence, which need to be deployed judiciously and tailored to specific sectors. Data infrastructure projects, like the EU’s flagship cloud initiative Gaia-X, and cooperative efforts, like the Nordic-Baltic Eight, show how Europe can succeed in building a secure digital future. 

Customised cybersecurity

The members of the European Union are anything but uniform in their threat profiles. A government entity in Portugal, for instance, faces different cyber risks to a similar agency in Poland, where threats emanate from Russia-linked cyber actors. This heterogeneity could limit the effectiveness of EU-wide initiatives, which must carefully balance guideline consistency with the flexibility needed to address the unique vulnerabilities of European nations.

A more granular EU policy, tailored to varying national threat landscapes, levels of data sensitivity, and types of infrastructure, could prove far more effective. In practical terms, such a policy must prioritise the cybersecurity of SMEs, which constitute the lifeline of the European economy. SMEs represent 99.8% of all EU businesses, support over 100 million jobs, and contribute more than half of the EU’s GDP. Protecting these enterprises with innovative, state-of-the-art cybersecurity measures is not merely a technical necessity but a cornerstone of Europe’s economic security.

AI-driven cloud computing infrastructure, in line with the Digital Decade vision, has the potential to modernise, or even revolutionise, cybersecurity for SMEs, by making enterprise-grade security accessible to smaller budgets. AI’s ability to provide continuous threat monitoring, real-time anomaly detection, and automated incident response – features once exclusively available to large corporate budgets – is game changing. By integrating these innovations into the cloud ecosystem, SMEs gain robust, multi-layered cyber defences.

However, the same technologies that empower defenders also embolden perpetrators. A 2024 foresight report by the European Union Agency for Cybersecurity (ENISA) highlights that AI amplifies the pace and sophistication of cyberattacks, particularly through AI-enabled phishing and the exploitation of cloud systems. Incorporating a ‘zero trust’ approach into Europe’s cybersecurity strategy may offer a compelling way forward. 

Unlike traditional perimeter-based defences, zero trust operates on the principle that no user is trusted by default. Access requires continuous verification, based on user behaviour, device integrity, and real-time risk assessments. AI technologies can improve this framework by pinpointing anomalies with uncanny precision. For instance, if a remote employee downloads large amounts of data outside regular working hours from an unfamiliar location, a system might restrict access and alert security teams before harm occurs. This adaptive approach surpasses static credentials like multi-factor authentication, which face growing vulnerabilities to phishing. For European SMEs, this robust cybersecurity model is particularly valuable, given the growing imperative to migrate operations to cloud environments

The promise of AI-enabled zero trust resonates with Europe’s push for data sovereignty, but not without complications. A significant challenge to European data privacy persists: AI algorithms rely on vast data sets, often comprising personal or proprietary information, in conflict with the EU’s General Data Protection Regulation (GDPR). The dilemma is compounded by the need for cross-border data sharing, viewed by many as critical for effective threat intelligence but fraught with sovereignty concerns. This conundrum may tether European AI-driven cyber defence measures to Gaia-X.

Gaia-X’s untapped potential

Gaia-X is Europe’s flagship collective cloud initiative. Unlike traditional cloud service providers, it is designed to regulate, connect, and synchronise European cloud providers,  enabling seamless data sharing across the continent and beyond. Despite its ambitious vision, the project has been marred by technological shortcomings and political discord, which have dampened enthusiasm among EU member states.

However, for European SMEs to operate securely in the cloud and for the EU to advance its goals of technological sovereignty, digital competitiveness, data autonomy, and economic security, Gaia-X is indispensable. Overcoming its technical and governance challenges would position it as Europe’s definitive cloud infrastructure – an ecosystem where European and non-European providers align with a unified set of parameters and standards.

Once fully operational, Gaia-X could use AI technologies to enhance cyber defence for SMEs. Cloud providers within the Gaia-X network could deploy AI systems under a zero-trust framework to monitor for suspicious activity and share anonymised indicators of compromise in real time, enabling collaborative threat response. Simultaneously, Gaia-X could serve as a secure, sovereign backup for data, helping SMEs with limited resources to better protect themselves against loss or compromise. 

Realising these ambitions requires substantial investment. The financial burden of such technological innovations is too high for most SMEs, so they need strong financial support and subsidies from the EU and its member states to meet the goals set in the Digital Decade policy programme. Investing in these technologies and scaling them through Gaia-X could revitalise this ecosystem, which many currently deem to have little future. 

A fully operational Gaia-X would mark a major milestone in advancing Europe’s quest for strategic sovereignty and autonomy while bolstering innovative and cost-effective cyber defence for SMEs and beyond. To make these ambitions a reality, the EU must identify a testing ground that combines digital maturity, geo-technological relevance, and a capacity for innovation – qualities exemplified by the Nordic-Baltic Eight (NB8).

Proving concepts in the Nordic-Baltic Eight

The NB8 regional cooperation format offers an unparalleled testbed for advancing cybersecurity innovation, combining digital sophistication, geopolitical resilience, and proactive regional activism. The Nordic-Baltic region has consistently demonstrated its leadership in digitalisation, with advanced e-governance, dynamic startups, and a focus on technological innovation. 

Latvia leads by example, with 87.2% of its public services for business accessible digitally. Sweden’s startup ecosystem, valued at €239 billion ($250 billion) in 2023 is double its worth five years earlier. Both examples highlight the region’s digital maturity. 

At the same time, NB8 countries have seen escalating cyberattacks, which underscore the urgent need for sophisticated and scalable digital defences. Estonia, for instance, endured 484 denial-of-service attacks in 2023, marking a 60% year-on-year increase in the wake of Russia’s full-scale invasion of Ukraine. These attributes position the NB8 as both a microcosm of Europe’s digital ambitions and a front-runner in tackling cybersecurity challenges.

The unique combination of cooperation, digital maturity, and geopolitical foresight makes the region an ideal environment for piloting AI-driven cloud technologies within the Gaia-X framework. By refining these solutions in a setting that balances technological advancement with real-world security threats, the NB8 can offer actionable insights and scalable solutions for the rest of Europe.