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The European Commission proposed the “tech sovereignty package” to strengthen the EU-wide digital autonomy and resilience. The package includes a set of measures to strengthen Europe’s capacity in semiconductors, artificial intelligence, cloud and open source. Besides, the package includes two legislative proposals: a) the Chips Act 2.0, and b) the Cloud and AI Development Act, both are supported by two strategies: the Open Source Strategy and the Strategic Roadmap for Digitalisation and AI in energy.
Background
The European Commission released a new technological sovereignty package in the beginning of June 2026, containing measures intended to increase European self-sufficiency in sectors such as AI, digital services, semiconductors and energy. But observers and industry groups are concerned that the possible impact on competitiveness “has not been thought through”. Thus, “tech sovereignty has remained strategically ambiguous in EU policy because the relationship between sovereignty and competitiveness remains unresolved”, said Nicole Lemke, a researcher on AI systems, markets and governance at the Berlin-based thinktank Interface. He added that “it was unclear how the two goals relate to each other in the EU’s vision.”
In areas such as digital and energy infrastructures, the unclear goals are compounded by a disagreement among EU member states’ governments “on the level” to which non-EU companies should be excluded from the European single market.
“Some [states] want strict EU-only ownership and control requirements that would effectively exclude US hyperscalers” others went on: they want interoperability with US providers preserved for competitiveness reasons. The present opinion is trendy: that the new EU’s tech sovereignty package has to find a way out of the modern “all-or-nothing debate”.
Urgent initiative
The “sovereignty’s move” comes at a period when Europe remains heavily dependent on suppliers outside the EU for core digital technologies, and when the demand for computing capacity rises in the member states “sharply with the spread of AI”.
The initiative’s package is designed to reduce “structural dependencies” and makes sure that the EU-27 “can develop, deploy and secure” technologies to satisfy Europeans’ needs; in this way, the package signals a major shift in the EU’s approach to technology, in general, and the digital one, in particular.
The Commission, however, pointed out that the “complete self-sufficiency” (rather than sovereignty) “was not the ultimate goal”: the press release notes that the EU would not “work in isolation and produce everything by ourselves in the future”, argued Henna Virkkunen, the Commissioner responsible for the digital-technology sovereignty at the inauguration of the new plans. She added that it was “not realistic, and not necessary”, but it is important to “really identify the areas” where the EU has had “risky dependencies”.
The Commission President said: “We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure. This is about protecting our citizens, defending our interests and making our own choices. Europe has the talent, the research excellence, the industrial base and the Single Market. Together, we must turn these strengths into technological sovereignty.”
Dan Jørgensen, Commissioner for energy and housing added, that “we are living through a global digital revolution and a worldwide race to shape the AI future: these technologies are transforming how we live, work and power our economies. Europe must not simply participate in this transformation; it must lead it. But leadership means doing so in a way that reflects our values: responsibly, sustainably and for the benefit of all consumers and sectors. Our task is clear: to manage the growing energy demands of digitalisation while unlocking the immense opportunities that innovation places within our reach”.
Source and citations from: https://ec.europa.eu/commission/presscorner/detail/en/ip_26_1187
The package’s content
The package contains four new initiatives, that can be regarded as the modern EU-wide digital sovereignty’s strategy: a) composing a legal framework aimed at encouraging semiconductor production inside the EU (known as a the Chips Act 2.0); b) establishing a legal framework to strengthen the EU’s cloud computing and AI industries; c) adopting plan for digitalisation and AI use in the energy sector; and d) formulating strategy for encouraging open source software in European technology companies.
The tension between sovereignty and competitiveness is particularly pronounced for in the Chips Act 2.0, an expansion of a 2023 legal framework that aims to increase European semiconductor production. However, in an industry with a highly complex supply chain, forcing companies to produce everything within the EU could hurt competitiveness rather than heighten it.
“Full sovereignty in the semiconductor space is simply not realistic,” notes Julia Hess, a researcher on global chip dynamics at Interface; and added that “the semiconductor value chain is extraordinarily complex, characterised by a transnational division of labour, diverse business models and multiple chip types.”
General reference to: https://sciencebusiness.net/news/sovereignty/commission-announces-plans-eu-tech-sovereignty-amid-fears-competitiveness-hit
Cloud and AI
Another legal framework included in the Commission package – the Cloud and AI Development Act – aims to increase the EU’s limited data center capacity. According to the Commission, this move involves a certain danger that the EU would be less attractive destination for tech investment and could expose EU digital services to disruptions caused by the third country actors.
However, several initiatives are proposed to increase capacity, including the creation of a single EU-wide sovereignty framework intended to simplify and harmonise the deployment of data centres in the EU. The goal would be to triple EU data center capacity in the next five to seven years. According to some experts, data centres are far from the only industry that the package could affect: ultimately, it is not to be forgotten that computing infrastructure is just one lever among many to boost AI development in Europe; capital, data access, regulatory clarity and talent matter equally for European AI competitiveness.
Yet, for others, it is important to realise that different industries have different needs, and to acknowledge that sovereignty means different things in AI, cloud computing and chips. “Only through this nuanced, ecosystem-specific approach can the EU chart a realistic path forward,” noted experts.
Digital autonomy through open source
Europe is home to over three million open-source contributors” “they deliver digital solutions made in Europe, for Europe, based on European principles and values”, notes the Commission.
Thus, the “open source strategy builds on this strength to develop and provide more sovereign solutions. It will scale up open source alternatives in priority areas such as cloud, AI, internet technologies, cybersecurity and semiconductors. It will also promote a stronger open-source ecosystem by investing in skills, supporting open-source start-ups, and improving the long-term maintenance and security of Europe’s open-source digital infrastructure.
The strategy will also support greater use of open source in public administrations through procurement guidelines and practical best practice. It will encourage uptake of European solutions and support standards and interoperability, including through initiatives such as the Open Internet Stack.
Building European cloud and AI capacity
The Cloud and AI Development Act (the Act is scheduled for Q4 2027) is a central part of the Commission’s AI Continent Action Plan. It aims to triple data center capacity in Europe over the next five to seven years and strengthen the role of the Apply AI strategy to boost adoption. he Apply AI Strategy is designed to enhance the competitiveness of strategic sectors and strengthen the EU’s technological sovereignty. It aims to boost AI adoption and innovation across Europe, particularly among SMEs.
More in: https://www.eu-cloud-ai-act.com/
The Act will support research and innovation in cutting-edge and sustainable technologies, while balancing AI ambitions with climate commitments. It will streamline conditions for deploying data centres across the EU, with a focus on highly sustainable and innovative facilities at the scale needed for the green and digital twin transition. It will also introduce a single EU-wide framework to assess cloud and AI sovereignty, while keeping most of our market open to like-minded partners.
This will help protect critical applications and sensitive data, and support the development and roll-out of advanced cloud and AI technologies. It will also support a more coordinated approach to AI uptake across Member States, including through the Experience and Acceleration Centres for AI that act as local hubs to support AI integration and scaling
On Apply AI Strategy, in: https://digital-strategy.ec.europa.eu/en/policies/apply-ai
Possible scenarios in the transatlantic clash over the EU Cloud and AI Development Act:
1. Managed coexistence. The EU and the US negotiate a pragmatic accommodation in which sovereign European requirements are recognized politically, while American providers adapt operationally. The US hyperscalers may increasingly create European sovereign cloud structures with localized governance models, EU only operational teams, enhanced cryptographic segregation, regionalized data processing, and contractual commitments designed to satisfy European sovereignty concerns. In practice, this would produce a partially compartmentalized but still interconnected transatlantic cloud ecosystem.
2. Gradual digital fragmentation. Europe incrementally develops a parallel sovereign digital ecosystem. Sensitive sectors such as government, defense, healthcare, energy, finance, telecommunications, and critical infrastructure become increasingly restricted to European-controlled or “trusted sovereignty-certified” infrastructures. Non sensitive commercial workloads may remain globally integrated, but strategically important sectors would migrate toward European-controlled operational environments.
3. Regulatory escalation and retaliatory measures. Technology regulation leads to broader transatlantic economic disputes involving semiconductors, AI exports, cybersecurity requirements, data transfers, digital taxation, competition law, and industrial subsidies. Organizations face conflicting obligations between EU sovereignty requirements and U.S. legal obligations. Compliance functions would become increasingly geopolitical.
4. Digital spheres of influence. The world gradually reorganizes into jurisdictionally distinct digital ecosystems. Global corporations increasingly need region specific cloud architectures, AI governance models, compliance systems, and data strategies. For risk professionals, this creates an entirely new category of geopolitical operational risk.
Source and citations from: https://commission.europa.eu/document/download/5445de81-9481-4335-9902-9756159ba614_en?filename=one-europe-one-market-roadmap.pdf
Next steps
Before adoption and entry into force, the present Commission’s draft will be negotiated by the European Parliament and the Council of the European Union. The Commission will continue its work to make Europe an AI continent, and is expected to launch a call for AI Gigafactories in July, following the European High Performance Computing Joint Undertaking Governing Board’s agreement reached in principle this June. The Commission will also launch a consultation with the EU member states, the European Investment Bank Group and other key stakeholders to set up a European equity capacity at scale to finance Europe’s tech sovereignty ambitions.