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Cloud computing and artificial intelligence models are becoming increasingly vital for the EU-wide economy, as well as for the delivery of public services and the Union’s technological resilience. Cloud, edge and related computing infrastructures are critical enablers for AI workloads, supporting the training, fine-tuning and inference of AI models across various socio-economic sectors. Hence, the EU’s idea to adopt cloud and AI development legislation…
Background
A couple of years ago, the EU commissioned an analysis of empirical evidences on the EU’s current and future requirements for cloud and AI infrastructure. Already available resalts revealed some important conclusions: the knowledge gaps in current developments, trends, barriers, challenges and opportunities for cloud development, etc. Hence, the study managed to “identify and quantify” existing capacity and future demand for the general-purpose cloud services and AI-optimised cloud computing, including energy consumption.
The study was carried out by several digital companies, e.g. Technopolis, Wavestone, STL Partners, Kappa Research, Timelex and Open Forum Europe. Its findings have been included into the Commission staff working document accompanying the Impact Assessment of the proposal for the Cloud and AI Development Act (CADA), adopted on 3 June 2026.
The study also addresses knowledge gaps by collecting evidence of current developments, trends, barriers, challenges and opportunities for cloud development across EU Member States. It supports the Commission in identifying and quantifying existing capacity and future demand for both general-purpose cloud services and AI-optimised cloud computing, including energy consumption.
More in the EU digital strategy: https://digital-strategy.ec.europa.eu/en/library/proposal-cloud-and-ai-development-act-cada
Besides, the latest Eurostat data indicated in 2023, that about 45 percent of businesses used cloud services (+4.2 percentage points from 2021); however, the “adoption rates” varied significantly in using cloud services by companies’ size: 77.6% of large enterprises, 59% of medium enterprises, and 41.7% of small businesses.
The Edge Observatory Deployment Data Report from 2024 noted that the node deployment has grown from 498 in 2022 to approximately 1,836 in 2024. AI node deployment generally means either using AI to automate the launching of Node.js web applications or setting up server hardware nodes (like GPU clusters) to run AI models.
More on cloud computing at: https://digital-strategy.ec.europa.eu/en/policies/cloud-computing
On “The AI infrastructure built for agentic AI” in: https://info.langchain.com/ai-infrastructure?utm_campaign=evergreen_ai_infrastructure_emea_cv&utm_campaign
Additionally on CADA
In June 2026, the Commission adopted the draft for Cloud and AI Development Act (CADA) with a subtitle “it establishes a framework for strengthening the cloud and AI ecosystem at the Union level”. The main act’s aim was to triple the EU’s data centers’ capacity within the next 5-7 years and fully meet the needs of EU businesses and public administrations by 2035.
The Act’s proposal would streamline the deployment of data centres by identifying suitable sites and simplifying permitting processes for projects meeting sustainability and innovation criteria.
Simultaneously, it will address the growing energy demands by promoting energy efficiency, the adoption of innovative cooling and power management technologies, and the integration of data centres within the broader energy system. The act’s final adoption is scheduled for the end of 2027. More on the Regulation’s draft in: https://www.eu-cloud-ai-act.com/
To strengthen Europe’s digital sovereignty in the cloud sector, the Act will work in tandem with a proposed single EU-wide cloud policy for public administrations and public procurement. This combined approach will foster the growth of European cloud providers and prioritise the use of highly secure cloud capacity for highly critical use cases.
Cloud and edge computing will be among the EU-wide digital technologies contributing to the sustainability goals of the European Green Deal by underpinning novel digital solutions. At the same time, the Commission is working on enhancing the sustainability of cloud and edge computing, notably through measures targeting the resource efficiency of data centers to meet the objective that “by 2030, data centres must be climate-neutral and highly energy efficient.” Current examples on how to achieve this are: the inclusion of data centres in the EU taxonomy for sustainable activities, new provisions in the Energy Efficiency Directive, Green Public Procurement criteria or the Code of Conduct for energy efficient Data Centers.
Thus, the EU member states must collectively ensure a reduction of final energy consumption of at least 11.7% in 2030, compared with the energy consumption forecasts for 2030 made in 2020. This translates into an upper limit to the EU’s final energy consumption of 763 million tons of oil equivalent and of 993 million tons of oil equivalent for primary consumption.
Reference to energy efficiency in: https://www.consilium.europa.eu/en/press/press-releases/2023/03/10/council-and-parliament-strike-deal-on-energy-efficiency-directive/
Present and future requirements for cloud and AI infrastructure
The commissioned study provides a comprehensive overview analysis of the EU-wide digital transition within the following vital elements:
= cross-border barriers to the provision of cloud services,
= lock-in practices within the AI computing stack,
= risks arising from third-country laws with extraterritorial effects,
= permitting procedures for data centres,
= necessary financial and fiscal incentives,
= constraints related to energy grids and other critical resources such as water
initiatives to improve access to capital for data center expansion, and
= public-sector efforts to promote the adoption of open-source solutions.
In addition, the study identified the following main challenges in the EU cloud and AI ecosystem:
= the limited and geographically concentrated availability of computing capacity within the EU, and
= the EU’s dependence on cloud and AI computing services provided by non-European suppliers.
Cloud and AI study: final report and executive summary
The updated report further analyses the underlying drivers of these problems and presents a range of policy options reflecting different levels of EU intervention. For each identified problem, the study assesses a baseline scenario alongside three sets of policy options, each comprising a number of policy measures.
These options are evaluated through a monetised cost-benefit analysis and complemented by a multi-criteria decision analysis based on three methodological approaches. This analysis demonstrates the robustness of the preferred policy option.
More in: European Commission. Directorate-General for Communications Networks, Content and Technology. By Bergamaschi, R., Borbon, Y., Branco, M., Denais, A. et al., Cloud & AI study – Executive summary, Publications Office of the European Union, 2026. https://data.europa.eu/doi/10.2759/0266190
Final report in: European Commission. Directorate-General for Communications Networks, Content and Technology. By Bergamaschi, R., Borbon, Y., Branco, M., Denais, A. et al., Cloud & AI study – Final report, Publications Office of the European Union, 2026. Reference to: https://data.europa.eu/doi/10.2759/9828163
Bottom-line. The proposed CADA’s general aim is to reduce EU’s developers’ dependence on non-European digital providers, to triple data centers’ capacity by 2035 and introduce a harmonised sovereignty framework for cloud services in the public sectors. The proposal is a direct response to the decline in EU-wide digital providers’ market share in cloud services from 29% in 2017 to 15% in 2022, and the fact that three non-European hyperscalers now control over 70% of the European cloud market. The EU’s deep dependence on a limited number of cloud suppliers from third countries poses a strategic risk to the Union’s economy, data security and operational autonomy. These providers are subject to third-country legislation with extraterritorial effects: including laws mandating data access and transfer, that may conflict with EU data protection rules and can potentially disrupt services unilaterally.
The CADA proposal establishes two linked initiatives” a) the Cloud Leadership Initiative, and b) the AI Leadership Initiative, collectively referred to as the “Cloud and AI Leadership Initiatives”. More about eight operational objectives in the two initiatives in: https://www.lovguiden.dk/en/det-offentlige/eur-lex-kommissionsforslag/2026-06-03-eu-forordning-skal-tredoble-cloud-kapacitet-og-styrke-digital-suveraenitet
Students from the Information Systems program at Telkom University Surabaya understand that the proposed *Cloud and AI Development Act* (CADA) represents a strategic move by the European Union to strengthen digital sovereignty and computing infrastructure in support of artificial intelligence workloads that are crucial to the economy and public services. This regulation aims to significantly expand data center capacity over the coming years by streamlining permitting processes, integrating energy-efficient technologies, and innovating data center governance to ensure the EU’s future technological competitiveness and resilience.
Thank you dear Dinda for your interests and comments. Best wishes, Eugene