‘A major shift in how Europe approaches technological sovereignty’: EU reveals new plans to reduce dependence on US and Chinese technology

EU unveils Chips Act 2.0, CADA and open source software strategy
The aim is to reduce dependence on foreign hyperscalers and support the EU cloud sector.
CISPE fears there are still loopholes that could allow US hyperscalers to continue operating

The European Commission has launched a major technological sovereignty program aimed at reducing the Union’s dependence on foreign technology suppliers, specifically targeting American and Chinese companies.

Three separate initiatives are part of the package, including the EU Chip Act 2.0, the Cloud and AI Development Act, and the EU Open Source Software Strategy.

Although anticipated, the changes respond to criticism over Europe’s reliance on foreign semiconductor makers, cloud infrastructure providers, computing clouds and other software proposals.

Europe outlines plans to reduce dependence on foreign technology suppliers

First and foremost, the EU Chip Law 2.0 follows on from the previous Chip Law, which focused primarily on semiconductors and manufacturing. Policymakers ultimately concluded that it was ineffective in increasing chip production capacity and that the market was still dominated by American suppliers.

The new program plans to expand semiconductor R&D facilities, improve access to private investment, and support pilot production lines, but more importantly, it moves one step closer to China’s state-backed way of working.

Separately, the Cloud and AI Development Act (CADA) addresses concerns that Europe is still dependent on non-European hyperscalers. The Commission wants to help increase computing resources, improve the availability and deployment of AI infrastructure and encourage investments in European cloud providers.

The third major announcement concerns the European Open Source Software Strategy, under which European institutions could increase their use of open source software (OSS) through new encouragement and promotion measures.

In total, these measures aim to strengthen technological capabilities in Europe, attract more investment and create more jobs in the sector.

However, these measures have still not satisfied certain market segments. CISPE, the body that represents nearly 50 European cloud computing companies, says some of the changes require better definition and stricter enforcement. The organization is concerned that some classifications are so low that non-EU providers could be eligible. “The law does not even ask buyers to consider European alternatives,” the organization said, urging the EU to “close loopholes that could be used to circumvent the rules.”

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