As the world’s only manufacturer of extreme ultraviolet lithography machines, the equipment without which advanced semiconductor production is simply impossible, ASML is effectively a barometer for the global AI industry.
Strong earnings signal that the AI boom can weather supply chain disruption, memory shortages, and geopolitical shocks. They confirm that the physical infrastructure underpinning the intelligence revolution is holding, and the appetite for AI hardware is still strong.
General Partner at OpenOcean.
That is good news. But ASML’s continued dominance also presents Europe with an uncomfortable mirror.
Because if you look closely at how this company came to be, and then look at the conditions facing European founders today, you start to wonder whether the next globally irreplaceable European technology company will actually be built here at all.
For Europe to develop another company that’s irreplaceable on the global stage, the funding and operating environment needs to change.
How government intervention shaped ASML in the long term
Founded over 40 years ago, ASML’s origins are inseparable from the role of the Dutch government. Substantial public investment and a long-term industrial vision gave a company working at the bleeding edge of physics and engineering the runway it needed to become what it is today.
No one expected a return in three years. No one demanded that it pivot to a more commercially obvious market. The Dutch state backed a deep-technology bet because it understood that some unique technologies and scientific research are worth pursuing even before the market fully understands them.
That model of patient, mission-aligned public investment is becoming ever more difficult to replicate inside the EU today.
State aid rules designed to protect the single market from distortion have the unfortunate side effect of significantly limiting the ability of European governments to fund early-stage companies at the frontier of hard science and engineering.
In short, it’s a regulatory framework designed to prevent the wrong kind of market interference, but it’s preventing some of the right kind.
This isn’t the only hurdle, as anyone operating in European venture capital has seen firsthand: when a portfolio company wants to scale across borders, the regulatory friction is extraordinary.
Significant country-specific compliance requirements and legal complexity can burn through time and capital before a product has even been brought to market. A 2024 International Monetary Fund (IMF) study equated EU market barriers to a 110% tariff on services and 44% on goods.
The 28th Regime is a start, not a solution
The EU is not standing still. The proposed 28th Regime and the broader EU Inc. initiative mark a genuine step towards a more startup-friendly business environment.
Fully digital company registration, streamlined cross-border operations, and a unified pan-European legal framework for businesses to operate within are all meaningful improvements.
For a technical founder building in Europe, reducing months of administrative overhead could genuinely be the difference between staying and planning to list in the US.
Rethinking registration mechanics would be a start, but the structural barriers to building the next ASML run deeper.
Capital markets are still fragmented, and there is still no homogeneous European funding ecosystem capable of writing those large, patient cheques that are so crucial for deep technology companies at the Series B stage and beyond.
A US-based competitor faces none of that. Similar deeptech startups in the US might not have better tech, but they will almost always also have much more funding available from US VCs than the top European companies. The difference is stark, and it costs Europe dearly.
And then there is the perennial vulnerability of these kinds of initiatives: voluntary adoption. A regime that member states and companies are not required to use is a regime that will be used selectively, at best.
A previous attempt by the EU to implement a unified cross-border sales framework lacked the political backing necessary to make its implementation effective, demonstrating the need to mandate such measures in order for them to reap results.
Without mandatory participation, the scope for political disruption increases. In such a scenario, the efficiency gains of the 28th regime will remain partial, and the network effects needed to make a true pan-European market will never fully materialize.
What Europe’s founders actually need
If the EU is serious about producing the next generation of globally irreplaceable technology companies in AI, quantum, or agentic infrastructure, it needs a much clearer long-term vision for technology investment.
One that recognizes which technologies are worth backing before the market does. One that creates the conditions for patient capital at scale. One that gives deep technology founders a realistic path to staying, building, and listing in Europe rather than crossing the Atlantic the moment they need serious growth capital.
The EU Inc. initiative is the right ambition. The Commission deserves credit for moving in the right direction. But ambition without enforcement is a statement of intent, not a strategy.
There are lessons to be learned from ASML’s inception if the EU is to succeed moving forward. Europe has vast strengths in R&D, science and deep tech, and now is the time to capitalize on them.
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