The European Commission unveiled a sweeping legislative package on Wednesday aimed at bolstering the continent’s homegrown technology sector, marking an aggressive shift toward technological sovereignty amid deep-seated anxieties over its reliance on the United States and China.
The proposals, which require unanimous approval from all 27 European Union member states, target critical vulnerabilities in advanced semiconductor manufacturing, cloud computing, and artificial intelligence (AI). The strategy signals a pivot in Brussels from merely regulating foreign Big Tech to actively subsidizing and protecting domestic alternatives.
According to an internal draft document, foreign providers currently supply over 80% of the EU’s digital products, infrastructure, and intellectual property. The cloud sector is particularly lopsided. U.S. giants Amazon Web Services, Microsoft Azure, and Google Cloud command 70% of the European market. A 2025 report by French consultancy Asteres estimated that the EU spends €264 billion ($306 billion) annually on American cloud software.
To counter this, Brussels introduced the Cloud and AI Development Act (CADA). The framework establishes strict sovereignty requirements for cloud workloads managed by public organizations.
EU Executive Vice-President Henna Virkkunen emphasized the necessity of ensuring critical systems lack a foreign kill switch, a risk underscored by geopolitical friction and fears that a future U.S. administration could abruptly sever access. Virkkunen noted that the 2018 U.S. Cloud Act, which permits American law enforcement to seize data stored abroad, makes it structurally difficult for U.S. companies to meet the EU’s highest sovereignty tiers.
“We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure,” said Commission President Ursula von der Leyen.
The legislative package outlines ambitious infrastructure goals, including a plan to triple the EU’s data center capacity within five to seven years. Furthermore, the Commission introduced Chips Act 2.0, a successor regulation designed to eliminate dependence on foreign chip design and supply chains. Under this act, the EU will prioritize constructing a domestic foundry dedicated to the cutting-edge semiconductor technologies essential for powering advanced AI.
The strategy has garnered strong backing from European industry players and lawmakers. An open letter signed by 13 European tech companies, including OVHcloud, Nextcloud, and Proton, urged a “Build European, buy European, protect European” approach.
The policy push is expected to exacerbate trade tensions with Washington, D.C., which has consistently pushed back against EU regulatory scrutiny and fines leveled at American tech firms.
While Brussels insists the measures are meant to strengthen domestic competitiveness rather than shut out foreign enterprises, critics warn against excessive protectionism. Keegan McBride, director of science & technology at the Tony Blair Institute for Global Change, warned that a “full retreat into a Europe-first tech approach” could isolate the continent.
“Great powers don’t just use technology at home — they must also have the global ambition to build, deploy, and export their technology to the world,” McBride said. “Right now, Europe isn’t doing this.”
