EU Unveils Technological Sovereignty Package: Chips Act 2.0, AI, and Cloud at the Core of the Strategy
The European Commission has announced the European Technological Sovereignty Package, an extensive set of measures aimed at strengthening the industrial and technological capacity of the Union in sectors deemed strategic for the next decade: semiconductors, artificial intelligence, cloud infrastructure, and open-source software.
This initiative arises from Europe's heavy dependence on non-EU suppliers for numerous critical digital technologies, while the spread of artificial intelligence is driving unprecedented growth in demand for computational capacity. According to the Commission, the objective is to reduce structural vulnerabilities in the European tech supply chain and create conditions for Europe to develop, implement, and protect essential digital infrastructures independently.
"Technological sovereignty" is the key concept of the entire package. The President of the European Commission, Ursula von der Leyen, emphasized that Europe cannot rely on external entities for technologies that support essential services such as hospitals, energy grids, and critical digital systems, highlighting the need to leverage the existing industrial, scientific, and research heritage on the continent.
Chips Act 2.0: Europe Focuses on Semiconductors for the AI Era
Among the pillars of the initiative is the new Chips Act 2.0, an evolution of the Chips Act that came into effect in 2023. Brussels believes that, despite advances made in recent years, Europe continues to rely largely on third countries for both the most advanced production and the design of semiconductors. The Commission also emphasizes that components for AI applications are expected to account for over 70% of the semiconductor market by 2030, necessitating a strengthening of European production capabilities in advanced technologies.
The new proposal includes accelerated authorization procedures, greater coordination with trusted international partners, and the introduction of a quality mark for European regions specializing in semiconductors. The adopted approach also aims to strengthen the entire industrial ecosystem by fostering greater integration among chip manufacturers and high-growth sectors such as data centers, cloud providers, and future AI Gigafactories.
Cloud and AI: Aim to Triple Data Center Capacity
The second legislative piece is the Cloud and AI Development Act, a central component of the AI Continent Action Plan through which Brussels aims to transform Europe into one of the main global hubs for artificial intelligence. One of the most ambitious goals is to triple the capacity of European data centers in the next five to seven years. To achieve this, the Commission intends to simplify the conditions for establishing new digital infrastructures on a continental scale, while simultaneously promoting high standards of energy and environmental sustainability.
The measure also introduces a unique regulatory framework at the European level to assess the degree of sovereignty of cloud and AI infrastructures. According to Brussels, this approach should help protect critical applications and sensitive data, while still keeping the market open for collaboration with reliable international partners. The plan also includes strengthening centers dedicated to the adoption of artificial intelligence in various Member States, with the goal of accelerating its integration in businesses and public administrations.
Open Source as a Strategic Lever
Another central element of the package concerns open source software. The Commission emphasizes that Europe can rely on over three million active contributors in the field and intends to leverage this base to develop solutions deemed more autonomous and consistent with European principles. The new Open Source Strategy includes investments for training skilled personnel, support for startups in the sector, and improvements in the maintenance and security of open software infrastructures. Priority areas include cloud, artificial intelligence, cybersecurity, internet technologies, and semiconductors.
Brussels also aims to encourage greater adoption of open-source solutions within public administrations through dedicated procurement guidelines and initiatives focused on interoperability and open standards.
Energy and AI: The Role of Data Centers in the Digital Transition
The Commission has paired the new legislative proposals with a Strategic Roadmap for Digitalisation and AI in Energy, a document that addresses the increasingly close relationship between the growth of digital infrastructures and the European energy system. On one hand, Europe must deal with still high energy prices and the need to increase industrial competitiveness; on the other hand, the expansion of data centers and AI infrastructures will lead to a significant rise in electricity demand.
The roadmap aims to ensure a sustainable integration of data centers into European energy grids, promoting coordination between the digital and energy sectors to ensure availability of clean energy and efficient resource use. Concurrently, the document foresees a wider dissemination of AI solutions for managing electrical networks, acceleration of smart meter adoption, and the development of artificial intelligence models for the energy sector trained on European data and developed by European companies.
Next Steps
The legislative proposals will now need to be negotiated by the European Parliament and the Council of the European Union before their possible final approval. In the meantime, the Commission plans to publish the call for future European AI Gigafactories as early as July and to begin consultations with Member States, the European Investment Bank Group, and other key stakeholders to define new financial tools aimed at supporting European ambitions regarding technological sovereignty.
No official figures for Chips Act 2.0 have been disclosed yet, but estimates suggest about 120 billion euros.
Chips-IT Foundation's Comment
Regarding the draft of Chips Act 2.0 published by the European Commission, Carlo Reita, director of the Chips-IT Foundation, expressed:
"The Chips Act 2.0 once again recognizes the unfortunately previously overlooked centrality of microelectronics in the whole digital revolution to the extent that the Commission has chosen to integrate this document into the Tech Sovereignty Package."
"The publication comes before the definition of the Multiyear Financial Framework 2028-2034, and therefore many uncertainties remain regarding the actual resources that will be dedicated to the initiatives outlined in the document. The setting places more emphasis on the demand aspect compared to Chips Act 1.0 but, beyond expressing European needs, it remains very vague on how these can be sustainably met in the current global framework. There is ample room on crisis management mechanisms but there are no visible measures that could provide a more secure framework for businesses, such as the use of public procurement to support companies, particularly SMEs and startups, based in the EU similarly to what is done in the USA."
"For the country, this Chips Act 2.0 still offers opportunities for development across the supply chain, from materials to production and testing machinery, from design to manufacturing and packaging of chips, to their integration in critical industrial sectors for the country: automotive, aerospace and defense, artificial intelligence. The Chips-IT Foundation sees its role and positioning reinforced by the priorities indicated in this document: an actor in the design of innovative, low-consumption circuits, animating and coordinating the ecosystem as a national Competence Centre (CADETTI), and a key partner of the European design platform EuroCDP, promoting technology transfer to businesses, also facilitating meetings between startups and investors."
"With adequate national support complementing it, the continued growth of Chips-IT can provide the country with an increasingly powerful tool to insert national priorities and activities into the European framework.