{"slug": "the-eu-wants-its-own-tech-supply-chain", "title": "The EU Wants Its Own Tech Supply Chain", "summary": "The European Commission introduced a Tech Sovereignty Package on 3 June to reduce Europe's dependence on foreign technology, particularly from the U.S., citing concerns over security and liability. The package includes the European Chips Act 2.0 and the Cloud and AI Development Act, along with strategies for open-source software and grid resilience, aiming to boost European tech supply chains.", "body_md": "It’s little secret that Europe is dependent on foreign technology—particularly U.S. tech—for office software, cloud services, AI, and more. This may have been easy to accept just several years ago, but when the [United States](https://spectrum.ieee.org/tag/united-states) government now [openly threatens](https://euobserver.com/19745/eu-rejects-us-claims-of-censorship-over-tech-rules-after-visa-bans/) European countries with military action, there is growing anxiety in Europe that technology dependency is a [liability](https://spectrum.ieee.org/tag/liability).\n\nOne 3 June, the [European Commission](https://spectrum.ieee.org/tag/european-commission), the European Union’s executive branch, [introduced a sprawling package](https://digital-strategy.ec.europa.eu/en/policies/eu-tech-sovereignty) that seeks to shift the tech [supply chain](https://spectrum.ieee.org/tag/supply-chain) in Europe’s favor.\n\nThis Tech Sovereignty Package contains four parts. Two are proposed laws—the [European Chips Act 2.0](https://digital-strategy.ec.europa.eu/en/policies/chips-act-2) and the [Cloud and AI Development Act](https://digital-strategy.ec.europa.eu/en/policies/cloud-and-ai-development-act). The other two are broader strategies—one to [promote open-source software](https://digital-strategy.ec.europa.eu/en/policies/open-source-strategy) and one to [shore up the EU’s electric grid](https://energy.ec.europa.eu/topics/eus-energy-system/digitalisation-energy-system_en#strategic-roadmap-for-digitalisation-and-ai-in-energy). Before the first two can become law, they must go through a long process involving the EU’s other two lawmaking bodies: the Parliament and the Council.\n\nThe Commission’s vision places European governments and crucial industry at the forefront of change, encouraging them to fund and buy European tech. Some analysts, however, are unconvinced the measures go far enough to change the status quo.\n\n## Part 1: [Chips Act](https://spectrum.ieee.org/tag/chips-act) 2.0\n\nAs indicated in the name, the [Chips Act 2.0](https://digital-strategy.ec.europa.eu/en/policies/chips-act-2) follows the EU’s original [Chips Act](https://spectrum.ieee.org/eu-chips-act-imec), adopted in 2023 (and not to be confused with its similarly named [U.S. counterpart](https://spectrum.ieee.org/chips-act-map).) The first European Chips Act encouraged investment in EU semiconductor production, aiming to reach a 20 percent share in the world market for “cutting-edge and sustainable” [microchips](https://spectrum.ieee.org/tag/microchips) by 2030. It supported pilot lines in areas like sub-2-nanometer chips and [photonics](https://spectrum.ieee.org/tag/photonics), in addition to both large fabs and small [startups](https://spectrum.ieee.org/tag/startups).\n\nEarly results have been mixed—[a 2025 audit](https://op.europa.eu/en/publication-detail/-/publication/d4bc75a6-2574-11f0-ac85-01aa75ed71a1/language-en) found that the first Chips Act had created progress in areas like [chip design](https://spectrum.ieee.org/tag/chip-design) and pilot lines, but deemed it “unlikely to be sufficient” to reach an “overly ambitious” target.\n\nOne criticism of the first Chips Act was that it did little to cultivate demand for European-made [semiconductors](https://spectrum.ieee.org/topic/semiconductors/). The Chips Act 2.0, then, includes demand-boosting measures that encourage governments and industry to use European chips, in addition to retaining its supply-side funding.\n\nThere are new supply-side elements, too. The Chips Act 2.0 allows the Commission to fund certain fabs as “strategic projects” and fast-track them through permitting. The Commission has proposed an open-access [foundry](https://spectrum.ieee.org/tag/foundry) to manufacture chips at 3-nm-process nodes or lower, which could start pilot production between 2030 and 2033.\n\nIf successful, European semiconductor manufacturers could take over the supply for industrial firms in automotive, defence, and [advanced manufacturing](https://spectrum.ieee.org/tag/advanced-manufacturing). Today, these firms are especially vulnerable to global supply-chain disruptions.\n\nAt the same time, some analysts still question whether the Chips Act will create enough demand. “The Commission clearly recognizes this in the revision and devotes considerable attention to demand-side levers,” says Tillman Schenk, researcher at [Bruegel](https://www.bruegel.org/), a Brussels-based think tank. “However, these instruments currently strike me as somewhat underdeveloped.”\n\nSome analysts [write](https://eurostack.eu/blog/the-commissions-tech-sovereignty-package-is-nearly-here-early-thoughts/) that to raise demand, the EU must explicitly require, not merely encourage, governments to “buy European.”\n\n## Part 2: Cloud and AI Development Act\n\nThe[ accompanying Cloud and AI Development Act](https://digital-strategy.ec.europa.eu/en/policies/cloud-and-ai-development-act) (CADA) focuses on cloud services and [data centers](https://spectrum.ieee.org/tag/data-centers). The [EU trails both the U.S. and China](https://www.iea.org/data-and-statistics/data-tools/energy-and-ai-observatory?tab=Energy+for+AI) in total data-center capacity, and European leaders say they need to close this cloud gap if both EU governments and industry are to make the most of cutting-edge AI.\n\nTherefore, CADA calls for a tripling of EU data-center capacity by the early 2030s.\n\n[Michael Winterson](https://datacentre.me/newsletter/the-eudca-announces-board-of-directors-for-2025-27/), Secretary General of the European Data Centre Association, calls the goal “achievable in principle” and says that “demand alone could justify a tripling of capacity.” Achieving this goal will require dramatically speeding up data-center projects that today might get stuck in permitting or waiting in a queue for electrical supply, he says.\n\nCADA stipulates that member states should designate particular projects and “acceleration zones” for fast-tracked approval. It also stipulates that, by 2030, data-center operators should be able to obtain the necessary permits and grid access—often a years-long process today—in 18 months.\n\nBut in Europe, there are [some rather large elephants in the cloud](https://spectrum.ieee.org/europe-cloud-sovereignty). Today, four U.S. hyperscalers—AWS, [Google](https://spectrum.ieee.org/tag/google) Cloud, [IBM](https://spectrum.ieee.org/tag/ibm) Cloud, and [Microsoft](https://spectrum.ieee.org/tag/microsoft) Azure—account for [over two-thirds of EU cloud services](https://www.ceps.eu/disk-backup-to-the-cloud-is-a-gaping-vulnerability-in-the-eus-security/). This troubles some Europeans because [U.S. law](https://en.wikipedia.org/wiki/CLOUD_Act) authorizes U.S. authorities to compel U.S. firms to hand over data even if stored abroad.\n\nTo ensure that more sensitive European data stays within Europe, CADA lays out a sliding scale of four “assurance levels.” Higher levels require more EU-located data, infrastructure, staff, and supply chains. However, national authorities can choose assurance levels as they see fit, so the same application might use different levels in different countries.\n\nSome analysts like EuroStack’s Stéfane Fermigier [note](https://eurostack.eu/blog/the-commissions-tech-sovereignty-package-is-nearly-here-early-thoughts/) that this leaves the door open for the assurance levels to be applied unevenly. American hyperscalers could locate data centers in the EU, claim sovereignty compliance, and avoid ceding ground to their smaller European counterparts.\n\n## Part 3: EU Energy System Road Map\n\nThe announcement of a threefold increase in the EU’s data-center capacity is unlikely to comfort the many Europeans who oppose their construction, [citing concerns](https://algorithmwatch.org/en/infrastructure-intrusion-conflict-data-center/) about their environmental footprints or their potential to strain the [electrical grid](https://spectrum.ieee.org/tag/electrical-grid). Partly in response, the EU’s tech sovereignty package includes a [“strategic roadmap”](https://energy.ec.europa.eu/news/commission-presents-measures-digitalise-europes-energy-system-while-ensuring-sustainable-2026-06-03_en) for Europe’s electrical grids.\n\nThe Commission [has proposed](https://energy.ec.europa.eu/news/rating-scheme-data-centres-eu-commission-launches-call-feedback-2026-03-27_en) a rating system that would grade data centers based on their efficiency and environmental footprint, but this scheme [has reportedly been delayed](https://www.theregister.com/on-prem/2026/06/10/brussels-datacenter-efficiency-scorecard-may-come-with-a-credit-warning/5253297) under pressure from data-center operators and some EU member states.\n\nThe road map includes support and research projects for [smart grids](https://spectrum.ieee.org/tomorrows-power-grid-will-be-autonomous) and for [AI models](https://spectrum.ieee.org/tag/ai-models) in the energy sector. It also plans to enable EU electric grids to more easily exchange data across borders.\n\nUnlike the Chips Acts or CADA, the road map is not a proposed law. In many cases, its measures are research projects or promises to introduce future [legislation](https://spectrum.ieee.org/tag/legislation) by the end of 2027.\n\n## Part 4: [Open Source](https://spectrum.ieee.org/tag/open-source) Strategy\n\nEuropean public administrations spend an [estimated €264 billion](https://www.cigref.fr/wp/wp-content/uploads/2025/05/TECHNOLOGICAL-DEPENDENCE-ON-AMERICAN-SOFTWARE-AND-CLOUD-SERVICES-AN-ASSESSMENT-OF-THE-ECONOMIC-CONSEQUENCES.pdf) per year on proprietary IT, with 80 percent going to American companies. In the past several years some European bodies have [made sporadic moves](https://techcrunch.com/2026/04/27/whats-behind-europes-efforts-to-ditch-u-s-software-in-favor-of-sovereign-tech/) toward open-source alternatives, perhaps most notably the French civil service’s [migration](https://www.zdnet.com/article/france-leaves-windows-for-linux-desktop/) from Windows to [Linux](https://spectrum.ieee.org/tag/linux).\n\nNow, the European Commission has unveiled an expensive strategy [to promote open source in the public sector](https://digital-strategy.ec.europa.eu/en/policies/open-source-strategy). In theory, open source could at once save on costs, phase out non-European software, and benefit European open-source developers.\n\nThe Commission’s plan stretches beyond office software and [operating systems](https://spectrum.ieee.org/tag/operating-systems). It envisions public services partaking in a “vibrant” open-source ecosystem for everything from AI to [RISC-V](https://spectrum.ieee.org/tag/risc-v) semiconductors to Web 4.0 architecture. It plans to fund open-source startups and developers in key sectors.\n\nAlthough this strategy is not in itself a law, CADA includes some open-source measures, like a provision to “encourage” public-sector bodies to use open-source cloud and AI. In theory, this could establish a precedent for governments to choose “open source first.”\n\n[Jordan Maris](https://opensource.org/blog/author/jordan-maris), EU Policy Analyst for the Open Source Initiative, is optimistic about the package. He particularly believes it could be a boon for maintainers of core software. “They will likely receive recognition and opportunities for funding,” he says. “My guess is it will predominantly serve individual developers but some community-led projects could also benefit.”\n\nMaris also says it can benefit developers of crucial [enterprise software](https://spectrum.ieee.org/tag/enterprise-software) like Collabora Online, Euro-Office, and Nextcloud. Other open-source advocates, however, [argue](https://eurostack.eu/blog/ecs-tech-sovereignty-package-update/) that the open-source measures in CADA do not go far enough. In particular, since CADA’s articles “encourage” public-sector bodies to prioritize open source rather than “require” it, the public sector may instead let inertia take its course.\n\nThis package is not final. The Chips Act 2.0 and CADA will now proceed through further European lawmaking, involving [the European Council and European Parliament](https://commission.europa.eu/law/law-making-process_en), a process that inevitably changes the content.\n\nThere’s also pressure from [U.S. tech firms](https://www.theguardian.com/technology/2026/apr/17/microsoft-us-tech-firms-lobbied-eu-secrecy-rules-datacentre-emissions) and [some of the EU’s own member states](https://subscriber.politicopro.com/article/eenews/2026/06/03/eu-delays-data-center-sustainability-label-after-heavy-criticism-00946716) to water down some of the requirements, as [already happened with some of the open-source measures](https://eurostack.eu/blog/ecs-tech-sovereignty-package-update/).", "url": "https://wpnews.pro/news/the-eu-wants-its-own-tech-supply-chain", "canonical_source": "https://spectrum.ieee.org/europe-tech-sovereignty-package", "published_at": "2026-07-07 10:06:53+00:00", "updated_at": "2026-07-07 10:30:48.013190+00:00", "lang": "en", "topics": ["ai-policy", "ai-infrastructure", "ai-chips", "ai-ethics", "ai-products"], "entities": ["European Commission", "European Union", "European Chips Act 2.0", "Cloud and AI Development Act", "United States", "Parliament", "Council"], "alternates": {"html": "https://wpnews.pro/news/the-eu-wants-its-own-tech-supply-chain", "markdown": "https://wpnews.pro/news/the-eu-wants-its-own-tech-supply-chain.md", "text": "https://wpnews.pro/news/the-eu-wants-its-own-tech-supply-chain.txt", "jsonld": "https://wpnews.pro/news/the-eu-wants-its-own-tech-supply-chain.jsonld"}}