The European Commission will announce a comprehensive policy package on June 3 aimed at strengthening the European Union’s technological sovereignty amid growing competition with the United States and China. The proposals seek to boost domestic production of advanced semiconductors, encourage open-source technology adoption, and reduce member states’ dependence on cloud computing and AI services provided by non-European companies.
What happened
The forthcoming “European Tech Sovereignty” package is set to include key measures such as a Chips Act 2.0, which will link increased public and private investments in semiconductor manufacturing with expanded European cloud infrastructure. This initiative aims to develop high-end chip production capabilities within the EU’s 27 member states.
In addition, a proposed Cloud and AI Development Act will mandate EU governments to conduct “sovereignty risk assessments” to evaluate the extent of reliance on foreign technologies, particularly from dominant U.S. firms like Amazon, Google, and Microsoft, which control about 70% of the EU cloud market. Based on these assessments, member states may be urged to transition critical infrastructure towards European providers for security and competitiveness reasons.
The package also plans to promote an Open Source Strategy to reduce European dependence on proprietary digital services by encouraging adoption of open-source standards and tools across businesses and public institutions.
These initiatives are part of the European Union’s broader strategy to assert greater control over its digital economy and compete effectively in the global race for AI and digital dominance.
Why it matters
The increased focus on technological sovereignty reflects the EU’s response to a shifting geopolitical landscape, where the U.S., China, and the EU are vying for leadership in next-generation technologies powered by artificial intelligence. The bloc aims to secure its economic future by fostering innovation, protecting critical infrastructure, and securing supply chains, especially for semiconductors, which are vital for a wide range of industries.
While the EU has implemented numerous digital regulations in recent years, these new proposals represent a more proactive effort to not only regulate but also build competitive technological capabilities internally. Success could position the EU as a stronger global player rather than a consumer reliant on imports of vital tech components and services.
However, the effectiveness of these efforts remains uncertain, as private investment commitments are crucial, and the EU still trails the U.S. and China in total spending on AI and semiconductor development.
Background
The EU has long depended on foreign technology providers, particularly from the U.S. and China, for semiconductors, AI tools, and cloud services. Previous initiatives, including the European Chips Act of 2023 and legislation such as the Digital Services Act and AI Act, have focused on digital regulation but have not yet translated into comparable economic power or technological independence.
European Commission President Ursula von der Leyen and other officials emphasize that global economic conditions have changed, mandating a shift in Europe’s approach to technology policy. Meanwhile, the ongoing global realignment and economic nationalism have increased pressure on the EU to safeguard its digital infrastructure and innovation ecosystem.
These proposals mark the EU’s next phase in balancing the desire for open markets with the need to reduce dependency on foreign suppliers amid growing geopolitical tensions.
Sources
This article is based on reporting and publicly available information from the following source:
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