The Great Unstacking

Is your cloud stack dangerously American?

The answer might be yes, with new US tariffs crashing into global supply chains. Whether running AI models, spinning up infrastructure, or just trying to keep your SaaS lights on, the cost of relying on US-based hardware and cloud will rise. A lot. In this issue, we explore how the tariffs will reshape Europe’s cloud and AI landscape—and what you should be doing right now to protect your margins, roadmap, and resilience.

Read on for the full article.

US tariffs are here—and they’ve landed squarely on the backbone of AI and cloud infrastructure.

On April 2nd, the US government introduced sweeping tariffs on imports, notably from tech hardware manufacturing hubs in East Asia. In a nutshell, US hardware manufacturers and resellers - even as a service - will pay a lot more to maintain production in the short term.

The fallout? A sudden and potentially severe cost increase for European companies building or running anything in the cloud. At the time of writing, no reciprocal (re-reciprocal?) tariffs have yet been introduced by the EU, but it’s a distinct possibility.

This isn’t just a spreadsheet problem. It’s a strategic one. Let’s break it down.

What’s Getting More Expensive?

Hardware
Data centre gear—servers, networking equipment, racks, switches, the whole lot—is about to get pricier. Think of enterprise-grade server hardware suppliers: Dell, HP, and many more. If designed or assembled in the US, the price increase will be passed on to EU buyers.

Cloud Services
US-based providers like AWS, Azure, and Google Cloud may pass infrastructure cost increases to customers. Given that such providers already offer top-of-market pricing as a general rule, the days of cheap hyperscale cloud might be over—at least for Europe.

AI Development
GPUs (think Nvidia, AMD) are mostly fabbed in Asia but are still designed in the US, and some are caught up in the tariff dragnet. Even where there’s an exemption, future uncertainty makes long-term AI projects riskier to plan and even more expensive to execute.

Who Stands to Gain?

European providers
Finally, a silver lining. Tariff-driven cost increases could tip the scales in favour of European cloud and AI providers—assuming they can scale up fast enough. We may see a minor renaissance in EU cloud adoption purely out of necessity.

Here are a few EU alternatives to the big three US-based cloud providers:

The strategically nimble
Organisations that are already multi-cloud or experimenting with sovereign or local clouds have a head start. This is the moment for strategic decoupling from US services—if possible in your stack.

What Could Break?

Data centre expansion plans
Between tariffs on steel and electronics, the cost of building AI-ready infrastructure just jumped. Microsoft has already scaled back projects, and others are expected to follow. It should be mentioned that the scaling back of data centres is also impacted by the proliferation of cheaper Chinese AI models, not just international trade wars.

Startups and small players
Are you a European startup selling into the US, using AWS, paying for Nvidia compute, and backed by American VC? These are three pressure points now affected by tariffs or looming countermeasures. Expect reduced margins, longer sales cycles, and a harder pitch.

Investor confidence
US VCs may withdraw from Europe, and European corporates may delay AI and cloud spending. If the EU retaliates with restrictions on US digital services, that fog of uncertainty only thickens.

What about AI Agents, specifically?

Increased Development Costs: AI agents need much computing power for training and operation. This power comes from servers, GPUs, and other specialized processors.

Tariffs on servers and other hardware will increase the cost of this kit, directly increasing the cost of developing and deploying AI agents.

• Higher Operational Expenses: Many AI agents operate in the cloud, utilizing services from providers like AWS, Google Cloud, and Azure. This means that the ongoing operational costs for AI agents that rely on this cloud infrastructure will also rise.
  

• Slower Innovation: Increased costs can lead to reduced investment in research and development. If acquiring the necessary hardware and cloud resources becomes more expensive, companies may have to scale back their AI agent projects, potentially slowing down innovation in the field.
  

• Impact on Specialized Hardware: Advanced AI agents often require specialized hardware, such as high-performance GPUs. The tariffs on these components will likely affect the cost and availability of these crucial components, further hindering development.

What Should You Be Doing?

1. Review your cloud spend exposure. You're at risk if you’re an EU company and your stack is 100% US hyperscaler. At minimum, map your dependencies. More realistically, have at least a plan to migrate at least some of your workloads to EU-based providers.
   

2. Ask your vendors how they’re responding. Will they absorb the costs, pass them on, or localise operations?
   

3. Reexamine your hardware sourcing. This is not the moment to be casual about GPUs, especially if you're planning AI training workloads.
   

4. Watch for EU countermeasures. These might include digital services tariffs, procurement restrictions, or new data localisation rules.

This is more than a trade spat.
These tariffs may be the starting pistol for a more fragmented AI and cloud market, where regional resilience becomes as essential as scale.

If your current strategy assumes infinite cheap GPU compute and seamless cross-border tech collaboration, it’s time to rethink. Start by asking: how much of your AI stack relies on infrastructure 6,000km away and suddenly 20% more expensive?

This isn’t a drill. It’s a new reality.

Want to become strategically nimble enough to profit from the geopolitical climate?

Temrel is an AI Automation and Workflow partner. We help companies implement AI to improve outcomes, lower costs, and increase efficiency. Interested in starting a conversation?
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