Speaking at a Berlin summit attended by regional tech firms, the leaders of Europe's biggest economies also pledged to ease rules for the digital sector that many firms complain are holding them back.

"Europe doesn't want to be the client of the big entrepreneurs or the big solutions being provided either from the US or from China, we clearly want to design our own solutions," Macron said, adding that this stance represented "a refusal of being a vassal".

Merz called for Europe to "join forces and forge its own digital path -- and this path must lead to digital sovereignty".

"Digital sovereignty has costs, but the costs of digital dependence are even higher," said the chancellor.

Merz said companies were pledging 12 billion euros ($13.9 billion) in investments for Europe's digital future at the summit, without providing further details.

- Uneasy US ties -

Europe is responding to calls to blaze its own digital path as concerns escalate about US tech dominance at a time of increasingly uneasy ties with Washington under the "America First" administration of Donald Trump.

Despite the US-Europe tensions, a senior official from the French presidency earlier said the summit was not about "confrontation" with the United States or even China, but rather protecting "our core sovereignty".

Merz urged "better conditions for digital innovation, which means we need a radical simplification of our regulatory practices".

Macron echoed his sentiments: "We prioritised during the past few years regulation of our domestic players. And this is what we have to change. We have to innovate before regulating."

The leaders' calls came a day before the EU was set to propose a rollback of its rules on AI and data protection -- a move welcomed by businesses, but criticised by privacy advocates.

Macron also urged preference to be given to European tech companies when giving out contracts, in particular from the public sector.

"Because guess what? The Chinese have a Chinese exclusivity ... and the Americans have a very strong American preference," he said.

- Sensitive data -

Calls have been growing for European firms to be more often given the job of handling sensitive data of the region's citizens, rather than handing it to foreign cloud computing giants.

Earlier at the summit, the EU's digital chief announced that Amazon and Microsoft cloud services could face stricter competition rules in the bloc as Brussels probes their market power.

Digital ministers from across Europe, as well as CEOs of tech firms like France's Mistral and Germany's SAP, took part in the summit.

A total of 18 new partnerships between companies and the AI sector were unveiled at the summit, bringing together one billion euros in investments, according to an EU initiative for promoting the technology.

This ranged from a tie-up between SAP and Mistral on a providing "sovereign" services, to deals involving Siemens, Mercedes-Benz and Allianz, it said.

As well as worrying about US dependence, Europe has long-standing concerns about reliance on firms in China and other parts of Asia for hardware, from semiconductors to laptop components.

But the continent faces an uphill battle to switch supply chains from foreign companies in the digital realm.

The region is struggling after a period of prolonged economic weakness and its tech firms remain far smaller than their US rivals.

As of last year, the continent's data centres -- crucial for AI -- had computing capacity of just 16 gigawatts, compared with 48 in the US and 38 in China, according to a recent study by German digital business association Bitkom.

But SAP CEO Christian Klein struck an upbeat note.

"We have our own industries that we are good at," he said during a panel at the summit. "Let's apply AI in these battlegrounds, then Europe has a bright future."

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Amazon.com

MICROSOFT

SAP

Siemens

Mercedes-Benz Group

ALLIANZ