The European Commission has unveiled a new technological sovereignty package that marks a significant political shift in the continent’s digital strategy. Brussels aims to reduce structural dependencies in semiconductors, artificial intelligence, cloud computing, and open source software—four areas now seen not just as economic sectors but as critical infrastructures for hospitals, energy grids, public services, companies, and administrations.
The package includes two legislative proposals, the Chips Act 2.0 and the Cloud and AI Development Act, alongside a new European open source strategy and a roadmap to digitize the energy system with artificial intelligence. The declared goal is to bolster Europe’s digital autonomy without closing the market to compatible partners but by increasing European control over data, supply chains, computing capacity, and essential infrastructures.
European Commission President Ursula von der Leyen summarized the approach with a phrase that sets the new tone in Brussels: Europe cannot afford to depend on third parties for the technologies that keep hospitals, electric grids, and secure services running. The political message is clear. The European Union wants to move from regulating technology to building more of its own capacity.
Chips Act 2.0: Europe aims to bring semiconductors, AI, and industrial demand closer
The first part of the package focuses on semiconductors. The original Chips Act, in effect since 2023, was Europe’s initial response to vulnerabilities in the global chip supply chain. However, the Commission recognizes that Europe still relies on third countries for advanced manufacturing and semiconductor design.
The new version, Chips Act 2.0, will seek to streamline permitting, strengthen cooperation with like-minded partners, create an excellence label for European regions specialized in semiconductors, and better connect chip manufacturers with industrial customers. Brussels intends to leverage growth sectors such as data centers, cloud providers, and AI gigafactories to generate demand within the continent.
Data from the Commission highlight the urgency: components related to artificial intelligence could account for over 70% of the semiconductor market by 2030. This means the race for chips will no longer just be about mobile phones, automotive, or industrial electronics but also about accelerators, memory, networks, advanced packaging, energy efficiency, and AI manufacturing capacity.
The challenge is considerable. Europe has strengths in lithography equipment, power electronics, industrial semiconductors, and certain automotive segments, but it does not lead in cutting-edge node fabrication or AI accelerator design at the scale of the US or Asia. The Chips Act 2.0 aims to close part of this gap, though its success will depend on real investments, administrative speed, and sustained industrial demand.
Cloud and AI Development Act: More data centers, but with sovereignty and sustainability
The second major element is the Cloud and AI Development Act, one of the most significant proposals in the package. The Commission intends to triple data center capacity across Europe over the next five to seven years and strengthen AI adoption in companies, administrations, and strategic sectors.
This measure aligns with the AI Continent Action Plan and aims to address one of Europe’s key bottlenecks: the lack of sufficient in-house computing capacity to train, deploy, and operate large-scale AI models. Without new data centers, energy, cloud, networks, and software, Europe’s ambition to be an AI continent remains just words.
The proposed law will simplify deployment conditions for data centers in the EU, with a focus on sustainable and innovative facilities. It will also establish a European framework to assess cloud and AI sovereignty. This could reshape the market by clarifying the difference between a simple cloud region located in Europe and a truly controlled infrastructure under European criteria.
The Commission emphasizes that most of the market will remain open to like-minded partners. However, the nuance is important: for critical applications and sensitive data, Europe desires greater guarantees regarding jurisdiction, control, third-party interference, security, and resilience. This could impact public procurement, regulated sectors, and companies handling particularly sensitive information.
The package also confirms that Brussels will launch a call for AI Gigafactories in July, following the initial agreement of the EuroHPC governance council on June 1. These facilities aim to provide Europe with large AI computing centers, though it remains to be seen which companies will utilize them, how they will be financed, and the role of European providers compared to non-European hyperscalers.
Open source and energy: Two aspects Brussels now treats as core
The third element of the package is the open source strategy. The Commission notes that Europe has over three million contributors to open source projects and aims to turn that base into a strategic advantage. The goal is to scale sovereign alternatives in areas such as cloud, AI, internet technologies, cybersecurity, and semiconductors.
This is crucial because digital sovereignty isn’t solely about data hosting locations. It also depends on the software operating infrastructure, standards, interoperability, and the capacity to audit, maintain, and adapt critical components. The Commission seeks to promote open source solutions within public administrations through procurement guidelines, best practices, and support for initiatives like the Open Internet Stack.
The fourth focus area concerns energy. Digitalization and AI will drive increased electricity demand in Europe, especially due to the expansion of data centers. The new roadmap for digitalization and AI in the energy sector aims to integrate these infrastructures more sustainably and transparently into the grid.
Brussels wants to facilitate cooperation between energy and digital sectors to ensure clean supply, protect water and energy resources, deploy smart meters, and develop sovereign AI models trained on European data. The idea is to help make the electrical system more efficient, not to compete with it for capacity.
This part of the package will be decisive. Europe can approve ambitious plans for AI, chips, and cloud, but without available energy, permits, grid connections, and social acceptance, real capacity won’t materialize. The Commission seems to understand that technological sovereignty is built not only through legislation but also through physical infrastructure.
The package still needs to be negotiated with the European Parliament and the Council before final adoption. Consultations with Member States, the European Investment Bank, and other stakeholders are pending to create a European-scale financing capacity. The direction is clear: Europe wants to move from being just a global technology regulator to acting as a digital industrial power.
Frequently Asked Questions
What has the European Commission presented?
It has presented the European Technology Sovereignty Package, with measures in semiconductors, artificial intelligence, cloud computing, open source, and energy system digitalization.
What is the Chips Act 2.0?
A new proposal to strengthen Europe’s capabilities in semiconductors, accelerate permitting, support strategic projects, and better connect the chip industry with sectors like data centers, cloud, and AI.
What does the Cloud and AI Development Act aim for?
To triple data center capacity in Europe over five to seven years, reinforce AI adoption, and establish a European framework to assess cloud and AI sovereignty.
Why is open source included in the package?
Because Brussels aims to promote more sovereign, auditable, and interoperable digital solutions in areas such as cloud, AI, cybersecurity, internet technologies, and semiconductors.
via: LinkedIn