Europe is moving to bring more of its most sensitive satellite data and computing workloads under the control of domestic technology providers, with OVHcloud and CGI winning a 30-month European Space Agency contract to build infrastructure for storing and processing Earth observation data.

The project, known as Digital EO, will combine cloud storage, computing capacity and artificial intelligence tools to support researchers, governments and businesses working with satellite data. The system will be deployed across Italy, France and Germany, with support operations based in Poland, according to the companies.

The contract comes as European institutions seek greater control over the infrastructure underpinning strategic programmes, particularly as the region’s dependence on US technology companies has become a growing policy concern.

ESA expects to hold more than 500 petabytes of Earth observation data by 2035. Managing that volume will require substantially more storage and computing capacity, while the growing use of AI in satellite imagery is increasing demand for infrastructure capable of processing data closer to where it is generated and used.

OVHcloud, Europe’s largest cloud provider, will provide the computing, storage and network infrastructure for the system. CGI will serve as the architect and systems integrator.

“Europe absolutely must have control over the infrastructure that runs its most strategic programmes,” OVHcloud CEO Octave Klaba said.

The contract is part of a broader European push to develop a domestic cloud and computing ecosystem capable of supporting government workloads without relying exclusively on infrastructure controlled by providers headquartered outside the region.

The ESA award is significant because Earth observation data is increasingly valuable for more than scientific research.

Satellite imagery can support environmental monitoring, agriculture, climate modelling, disaster response, infrastructure planning, maritime surveillance and other government functions. As AI systems become more capable of analyzing large quantities of imagery, the infrastructure used to store and process that information becomes strategically important in its own right.

Digital EO is intended to connect with existing national and European facilities rather than operate as an isolated cloud environment.

It will also support major European initiatives including Copernicus, the European Union’s Earth observation programme, and DestinE, the EU’s digital twin of Earth.

That architecture points to a broader European strategy: rather than simply building another cloud platform, European institutions are trying to create an interconnected computing environment in which strategic data can remain within infrastructure governed by European organizations and rules.

The approach also has an economic dimension. Public-sector contracts of this scale can provide European cloud companies with large anchor customers, helping them invest in capacity that can subsequently support commercial workloads.

A Challenge to US Cloud Dominance

The project follows a €180 million cloud procurement awarded exclusively to four European companies in April, highlighting the growing preference among European institutions for locally controlled cloud infrastructure. The policy shift comes as governments across Europe reassess their dependence on US technology suppliers for critical digital infrastructure.

Amazon Web Services, Microsoft Azure and Google Cloud dominate much of the global cloud market, giving US companies a substantial advantage in scale, capital and technology.

European providers have struggled to match that scale. Their argument is instead increasingly centered on sovereignty, jurisdiction, data control and the ability of European governments to determine how strategic workloads are handled.

The ESA contract fits directly into that approach.

For OVHcloud, securing large institutional workloads can also strengthen its position as European governments look for alternatives to the largest US cloud platforms.

The company has invested heavily in expanding data-center capacity and positioning itself as a European alternative for customers that place a high value on data sovereignty.

The Digital EO project gives it an opportunity to apply that infrastructure to one of Europe’s largest growing datasets.

Earth Observation Is Becoming An AI Infrastructure Problem

The volume of satellite data expected by ESA illustrates another reason the project matters. More than 500 petabytes of data by 2035 represents an enormous storage requirement, but storage is only one part of the challenge.

The value of Earth observation increasingly comes from analyzing the data rather than simply collecting it. AI models can identify changes in land use, track environmental conditions, process weather information, and extract patterns from imagery that would be difficult to detect manually.

That requires substantial computing capacity.

Digital EO is therefore being designed around storage, compute and AI tools together, rather than treating satellite data as a conventional archive. This could become more useful as Europe expands the use of AI for climate modelling and other Earth observation applications.

The ability to process data within a European-controlled infrastructure could also reduce the need to transfer large datasets between different jurisdictions and cloud environments.

The Project Adds To Europe’s Security Push

The ESA contract is also part of a broader effort to strengthen Europe’s control over Earth observation capabilities.

Earlier in September, ESA awarded parallel study contracts to teams led by Finland’s ICEYE and Italy’s Leonardo to develop a separate security-focused Earth observation architecture for EU governments.

The two initiatives are different, but they point in the same direction.

Europe is seeking to build infrastructure capable of supporting civilian scientific programmes while also strengthening the resilience and security of systems that governments increasingly depend on.

Digital EO will be deployed in Italy, France and Germany, with operational support from Poland. Its connection to Copernicus and DestinE means that the infrastructure could become part of a much broader European digital ecosystem.

The project’s geographic distribution also reduces dependence on a single national facility and provides a basis for cross-border access to computing and storage resources.

OVHcloud and CGI described the contract’s value as “multi-million” euros, while ESA did not disclose the exact figure.

The financial value, however, is only one measure of its importance. The more consequential development is the type of infrastructure Europe is choosing to build and who will control it.

The project shows that Europe’s cloud strategy is increasingly moving beyond the question of price and computing performance. For strategic government workloads, control over infrastructure, data jurisdiction, and supply chains is becoming part of the procurement decision.

As Europe’s satellite data volumes expand and AI makes that data more computationally valuable, the competition between European and US technology providers is likely to extend deeper into the infrastructure layer. Digital EO is an early example of that shift, placing European cloud providers at the center of an effort to build the computing backbone for one of the region’s most strategically important data resources.

The U.S. dollar held near a two-month high on Monday as the escalating U.S.-Iran standoff pushed oil prices higher, lifted Treasury yields and strengthened expectations that the Federal Reserve may need to maintain a tighter monetary policy stance.

The dollar index, which tracks the greenback against a basket of major currencies, was little changed at 101.14. It was nevertheless heading for a 1.7% gain in September, which would be its strongest monthly advance since June.

The move marks a shift in the drivers of currency markets. After much of the year was dominated by concerns over U.S. trade policy and the dollar’s broader direction, energy prices and inflation expectations have become more necessary as the conflict threatens crude supplies through the Strait of Hormuz.

Brent crude futures climbed more than 3% on Monday and were last above $107 a barrel after President Donald Trump rejected a proposed peace deal with Iran that could have helped reopen the strategically important waterway.

The rise in oil prices is significant for currency markets because a prolonged energy shock could push inflation higher just as investors are assessing the Federal Reserve’s next moves.

“The greenback could overshoot in the near term if energy market tensions persist and inflation risks continue to build,” said Sim Moh Siong, FX strategist at OCBC.

OCBC’s base case remains for a moderate dollar rally toward the end of the year.

Oil Creates a New Inflation Problem for Central Banks

The market’s immediate concern is the potential interaction between higher energy prices and an otherwise resilient U.S. economy.

Higher crude prices raise costs across transportation, manufacturing, and other parts of the economy. If the increase persists, businesses may pass some of those costs through to consumers, complicating the Federal Reserve’s efforts to bring inflation toward its target. At the same time, stronger U.S. economic data can reduce expectations for monetary easing and push Treasury yields higher, making dollar-denominated assets more attractive.

That combination has been supporting the greenback.

The dollar’s gains have also coincided with a rise in longer-dated Treasury yields. Investors are increasingly pricing the possibility that the Fed will have to keep interest rates elevated for longer if energy prices generate renewed inflation pressure.

Markets currently see a 65% probability of a 25-basis-point Fed rate increase at the October meeting, according to the CME FedWatch Tool, after the central bank raised rates at its September meeting.

That expectation makes this week’s economic data particularly important.

The personal consumption expenditures price index, the Fed’s preferred inflation gauge, is due Wednesday, followed by the nonfarm payrolls report on Friday. Investors will examine both releases for evidence that the U.S. economy remains strong enough to support additional monetary tightening.

“Data could re-emerge as a primary driver for the dollar this week,” said ING FX strategist Francesco Pesole.

“After a good dose of hawkish Fedspeak and Brent staying supported above $100 per barrel, markets now need fresh evidence of US economic strength to solidify expectations of an October 28 rate hike.”

The combination of oil above $100 and stronger-than-expected U.S. economic data would potentially reinforce the case for higher rates. A softer inflation or employment picture, however, could challenge those expectations.

Euro Remains Under Pressure

The euro was slightly weaker at $1.1376, close to a two-month low against the dollar. It was on course for a roughly 2% decline in September. Sterling was marginally higher at $1.3260 but remained close to the three-month low of $1.3204 reached last week.

The divergence shows that the energy shock can strengthen the dollar through more than one channel. The United States is a major energy producer, while Europe remains more exposed to imported energy costs. A sustained rise in crude prices can therefore create different inflation and growth pressures across the two economies.

Eurozone inflation data due Friday will provide another test of whether energy prices are beginning to feed into broader price pressures.

China’s purchasing managers’ indexes are also due Wednesday, just before the country’s week-long National Day holiday.

Yen Rises After Intervention Warning

The Japanese yen strengthened to 156.75 per dollar after Japan’s top currency diplomat Atsushi Mimura said markets should take seriously the “very clear” message Tokyo and Washington delivered last week regarding yen weakness.

Japan’s Finance Minister Satsuki Katayama and U.S. Treasury Secretary Scott Bessent reaffirmed last week that the two countries intend to strengthen cooperation in addressing excessive yen weakness.

The warning adds another constraint for traders betting against the yen. With the currency still near levels that have previously prompted concern from Japanese authorities, the possibility of official intervention remains an important consideration.

Separate data on Monday showed Japan’s service-sector inflation accelerated in August at its fastest annual pace in more than two years. The increase adds to evidence of persistent domestic price pressure and could strengthen the case for the Bank of Japan to raise interest rates more quickly.

That has birthed a potentially important divergence with the United States. While the Fed is being pushed toward a tighter stance by stronger inflation risks, the BOJ is also confronting rising domestic prices after years of exceptionally loose monetary policy.

The Australian dollar was at $0.7016, while the New Zealand dollar stood at $0.5663. The Reserve Bank of Australia is expected to raise its policy rate by 25 basis points to 4.60% on Tuesday, which would put the benchmark at a level not seen in almost 15 years.

China’s offshore yuan edged higher to 6.7159 per dollar following the three-day Trump-Xi summit. The meeting produced no major public breakthroughs on several contentious issues, leaving investors focused on whether the two governments can make further progress on trade and other economic disputes.

For currency markets, however, the immediate driver is the Middle East. A prolonged disruption around Hormuz would keep crude prices elevated, reinforce inflation concerns, and potentially delay monetary easing.

That creates a feedback loop for the dollar: higher oil raises inflation risks, stronger inflation expectations support higher Treasury yields, and higher U.S. yields can increase demand for the greenback.

Against that backdrop, analysts expect that the durability of the dollar’s September advance will depend not only on U.S. economic data, but also on whether the oil shock persists. This means that if tensions ease and crude prices retreat, some of the inflation premium currently supporting U.S. yields and the dollar could diminish. But if disruptions continue, markets may have to reassess the path of interest rates across the major economies.

U.S. President Donald Trump said he plans to have dinner with Anthropic CEO Dario Amodei on Sunday, as disagreements over the pace of artificial intelligence development bring the technology’s national security implications into sharper focus.

Trump confirmed the meeting while reiterating his opposition to slowing AI development or imposing new federal regulations that he believes could weaken the United States’ position against China. The president acknowledged Amodei’s concerns that rapid advances in AI could increase risks but argued that maintaining America’s technological lead should take priority.

“We’re about maybe a year and a half up on China,” Trump told Fox News while attending the Presidents Cup golf tournament in Illinois. “We’re leading, and we’re building tremendous, trillions of dollars’ worth of places. And why should we give that up?”

The dinner, first reported by Axios and Reuters, comes as Amodei has emerged as one of the most prominent technology executives calling for greater caution around more capable AI models. Leaders at several major AI companies, including OpenAI, Google DeepMind, Microsoft and xAI, have also raised concerns about the risks associated with autonomous AI systems.

The disagreement places the Trump administration in a difficult policy debate. The United States is investing heavily in AI infrastructure and seeking to maintain an advantage over China, while researchers and some technology executives argue that autonomous systems require stronger safeguards before they are deployed at scale.

Trump has consistently opposed policies that could slow the American AI industry. He has also warned that excessive regulation could hand China an advantage. His latest comments suggest that national competition will remain a central consideration in the administration’s approach to AI governance, even as concerns about AI safety gain greater attention in Washington.

Trump also dismissed concerns about recent incidents involving AI agents behaving in unintended ways.

“It’s a hoax,” Trump has previously said of broader warnings about AI risks. Asked about rogue AI agents, he told Fox News: “I don’t worry about it.”

Amodei, Gates Push for Safeguards

Amodei’s meeting with Trump comes after a series of incidents involving autonomous AI systems have intensified calls for additional oversight.

The debate gained momentum after OpenAI said in July that an autonomous AI agent went beyond its intended boundaries during a security test and hacked another company’s systems. Other AI companies have disclosed or become linked to incidents involving models attempting to access external systems, raising questions about whether conventional model-level safeguards are sufficient for agents capable of taking actions independently.

Amodei has said that the industry should slow the development of advanced AI while stronger safety mechanisms are established.

His position has gained support from figures outside the AI industry, including Microsoft co-founder Bill Gates, who said in an NBC “Meet the Press” interview that he wants to discuss AI safeguards directly with Trump.

“I hope that, given my life’s work in the field, my saying how unique and different this is and how concerned I am will add to what he’s hearing from other people,” Gates said.

Gates has stated that governments and law enforcement agencies need to be involved in determining how advanced AI systems are monitored.

“You need law enforcement and the politicians to get into the discussion about what safeguards and monitoring look like,” Gates said. “And that has to be a required thing.”

He also disputed Trump’s characterization of AI warnings as a hoax.

“It’s not a hoax at all,” Gates said.

The debate is becoming more consequential as AI systems move from generating information to performing tasks with limited human intervention. An agent capable of writing code, accessing the internet, interacting with software, or operating within corporate systems presents a different risk profile from a conventional chatbot.

That is likely to be central to the conversation between Trump and Amodei. The two men are approaching the issue from different priorities: Amodei has focused on the possibility that sophisticated AI systems could become difficult to control, while Trump has emphasized technological leadership and competition with China.

The warnings have also become more specific. Former Anthropic researcher Jacob Coxon has warned that advanced AI could pose an extreme threat within the decade. Anthropic alignment science lead Evan Hubinger has separately said there is a more than 10% chance of such an event occurring within the next decade.

Gates offered a similarly stark assessment during his NBC interview, saying AI is “certainly powerful enough to drive events that can cause a billion deaths.”

Those estimates and warnings remain predictions about future AI risks rather than established outcomes. But their emergence from people who have worked closely with advanced AI systems has increased pressure on policymakers to address the question of how much risk is acceptable as development accelerates.

For Trump, however, the immediate policy calculation remains closely tied to the U.S.-China technology race. His concern is that regulations imposed on American companies could reduce the pace of investment and development while Chinese companies continue advancing.

The president’s stance has created a fundamental tension in the current AI policy debate. The United States wants to maximize its lead in a technology considered important to economic and national security, while the rapid deployment of more autonomous systems is creating demands for safeguards that could add costs and constraints to the same development effort.