The European Commission adopted what it calls a 'Tech Sovereignty Package' on June 3, a set of four legislative instruments designed to reduce the European Union's dependence on non-European digital technology, which currently exceeds 80 per cent across cloud computing, semiconductors, and digital services.
The package has four components: the Cloud and AI Development Act, Chips Act 2.0, an EU Open Source Strategy, and a Strategic Roadmap for Digitalisation and AI in Energy.
The Cloud and AI Development Act is the most ambitious piece. It establishes four assurance levels for cloud infrastructure, with the highest tiers requiring that data be processed and stored within the EU, and that providers demonstrate independence from oversight by third-country governments. It also targets a tripling of EU data centre capacity within five to seven years.
Chips Act 2.0 extends the original Chips Act adopted in 2023, increasing ambitions for European semiconductor manufacturing to reduce reliance on Asian supply chains, a vulnerability the COVID-19 pandemic and geopolitical tensions with China brought into sharp focus.
The package now passes to the European Parliament and Council for legislative process. It is not expected to be finalised before the end of 2027.
The proposals directly target American hyperscalers, including AWS, Microsoft Azure, and Google Cloud, which collectively hold the majority of European enterprise cloud market share. Chinese hardware suppliers in the networking and chip sectors are also in scope.
The package is the most aggressive assertion by any major economy of control over its digital infrastructure.
