On June 3, 2026, the European Commission announced a comprehensive set of proposals aimed at strengthening the European Union's technological independence, particularly in the areas of chips, artificial intelligence (AI), and cloud services, as the bloc seeks to reduce its reliance on U.S. and Chinese technology providers [1]. The proposed measures, which require approval from all 27 EU member states, include the introduction of the Cloud and AI Development Act (CADA) and a new Chips Act 2.0 [1].
The CADA is designed to mitigate risks associated with the EU's dependence on third-country cloud computing services by establishing an EU-wide framework that defines varying levels of sovereignty for cloud computing, especially for sensitive workloads in public organizations [1]. Executive Vice-President Henna Virkkunen emphasized the need to ensure that critical cloud providers do not possess a 'kill switch' that could compromise European data, noting that U.S. companies may struggle to meet the highest sovereignty standards due to the U.S. Cloud Act, which allows American law enforcement access to user data regardless of storage location [1]. Commission President Ursula von der Leyen stated, 'We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure' [1].
Legal experts, such as Catherine di Lorenzo of A&O Shearman, described the CADA as a 'significant shift,' highlighting that the new direction extends beyond data residency to include ownership structures, immunity from extraterritorial laws, operational control, and supply-chain transparency [1]. The European Commission has previously considered restricting member governments' use of U.S. cloud providers for sensitive data [1].
In addition to cloud and AI, the Commission unveiled Chips Act 2.0, building on earlier efforts to secure semiconductor supplies and increase the EU's share of the global chip market [1]. The new act aims to address overdependence on third countries for chip design and manufacturing, as well as to improve crisis preparedness [1]. The Commission stated that it will prioritize building a foundry for advanced semiconductor manufacturing to support AI and other cutting-edge technologies [1].
CONCLUSION
The European Commission's new tech sovereignty package marks a decisive move to reduce the EU's reliance on U.S. and Chinese technology, with significant regulatory changes proposed for cloud, AI, and semiconductor sectors. If approved, these measures could reshape the competitive landscape for global tech providers operating in Europe and bolster the bloc's technological resilience.