Europe's Tech Sovereignty
European Union unveils new laws to boost domestic tech and reduce U.S. reliance
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The European Commission proposed two sweeping new laws on June 3 to cut Europe's dependence on U.S. tech giants, according to Reuters. The package includes the Cloud and AI Development Act and a revamped Chips Act 2.0, both aimed at building a homegrown tech industry across cloud computing, artificial intelligence, and semiconductors.
The move comes as U.S. firms control roughly 70% of Europe's cloud market. The EU wants to double its share of global semiconductor production to 20% by 2030, up from about 10% today. Both proposals must still be approved by EU member states and the European Parliament before they become law.
Why Europe Says It Cannot Wait Any Longer
The 2024 Draghi Report found the EU relies on non-EU providers for over 80% of its digital products and services. European Commission President Ursula von der Leyen put it bluntly: "We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure," according to Reuters.
Tech Sovereignty Vice-President Henna Virkkunen went further. She warned of potential "kill switches" hidden in foreign technology. "In critical fields, it is very important that technology is controlled by Europeans from Europe and data is staying here," she said, as reported by Reuters.
What the Cloud and AI Development Act Would Do
The Cloud and AI Development Act would give fast-track planning approval to new data centres — but only if they use European-made chips. Those facilities would also get preferential access to electricity grids and pay lower network charges, according to Reuters. Vendors bidding for sensitive public contracts in defence, banking, and healthcare would have to use EU-made software and hardware.
The EU spends roughly €2.6 trillion a year on public procurement — about 15% of its entire GDP. The Commission wants to use that spending power as a lever to push government buyers toward European tech providers instead of U.S. giants like Amazon Web Services, Microsoft, and Google.
Chips Act 2.0 Targets Advanced Semiconductors by 2030
The original Chips Act came into force in September 2023 as an emergency response to pandemic-era shortages. The new version goes much further. It would push European chip makers and their customers to sign long-term purchase agreements — guaranteeing future orders so that new factories remain financially viable, Reuters reported.
The updated act also shifts focus from older, simpler chips to advanced sub-3nm chips that power AI workloads. Pilot production lines are targeted for 2030 to 2033. The Commission would also gain new powers to redirect chip supplies to "crisis-critical" buyers during emergencies, overriding private contracts if necessary.
U.S. Pushback and Doubts Inside Europe
Washington has warned that the package amounts to protectionism. U.S. trade groups argue it would raise costs for European businesses and cut them off from the fastest advances in AI, which are happening in the U.S. and China. MEP Alexandra Geese pushed back, telling Reuters: "Our message is simple: Build European, buy European, protect European."
Not everyone inside Europe is on board either. Sweden and Czechia have raised concerns that tough sovereignty rules could create "disproportionate burdens" for businesses during a critical AI build-out period. Environmental groups also flagged a clause that could block public access to data on how much water and energy individual data centres actually consume.
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