Brussels unveiled sweeping proposals to reduce Europe's reliance on American and Chinese technology, acknowledging that 92% of Western data sits on U.S.-owned infrastructure and the EU depends on foreign suppliers for more than 80% of its digital products and services. European Commission President Ursula von der Leyen said on June 3, 2026: "We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure."
The European Technology Sovereignty Package includes two legislative proposals — the Chips Act 2.0 and the Cloud and AI Development Act, known as CADA — alongside an open-source strategy and a roadmap for digitalization in the energy sector. The measures aren't yet law and must move through the EU policymaking process. Von der Leyen framed the push as essential to protecting citizens and defending European interests, saying: "This is about making our own choices."
The Cloud Computing Gap
Europe's position in cloud infrastructure has deteriorated sharply. AWS, Microsoft Azure and Google Cloud control roughly 70% of the European cloud market, while European providers hold about 15%. That's a collapse from 29% in 2017. The Data Act, which began to apply one year ago in September 2025, introduced measures to ease switching between providers and reduce lock-in effects. But in the same year Brussels designated AWS and Azure as "gatekeepers" under the Digital Markets Act, citing entrenched market positions and high switching costs.
CADA aims to triple the EU's data-center capacity over the next five to seven years, speed up permitting for new facilities, and ensure computing capacity supports AI expansion. It introduces a four-tier sovereignty framework. The first level requires data processing on EU infrastructure. The second adds independence from third countries and supply-chain transparency. The third demands EU ownership and control of providers. The fourth — the highest — requires full transparency and freedom from foreign interference.
Sebastián Muriel, Telefónica's chief digital officer, criticized the focus on physical location. In an article published in Cinco Días on May 23, he wrote: "It makes no difference whether the server is in Madrid, Frankfurt or Dublin if the parent company is in Redmond or Mountain View." He added: "We are encouraging a situation in which sovereignty becomes little more than a label stuck on a rental contract."
Investment and the AI Deficit
Europe's investment effort lags its rivals. The EU spent €381.4 billion on research and development, equivalent to 2.22% of GDP, according to the European Commission's State of the Digital Decade 2025 report. That's 34% lower than the combined investment of the United States and China. Mario Draghi has noted that only four of the world's 50 largest technology companies are European, and PwC's Global Top 100 Companies 2026 report says not a single European firm ranks among the world's 10 largest tech companies by market capitalization.
The AI gap is stark. In July, the highest-ranked European AI model stood in 89th place in Artificial Analysis's rankings. Every model above it came from either the United States or China. Draghi said a year after his report on European competitiveness: "Inaction threatens not only our competitiveness, but also our sovereignty." He noted that nearly 30% of unicorns created in Europe had moved their headquarters abroad.
Semiconductors, Open Source, and Energy
The Chips Act 2.0 addresses Europe's share of just under 10% of global semiconductor production, according to Polytechnique Insights. The proposal aims to strengthen European capabilities, develop cutting-edge technologies, and stimulate domestic demand for chips produced in Europe.
The Commission's open-source strategy seeks to reduce dependence on proprietary software controlled by external providers, particularly in public administrations. The energy roadmap addresses the electricity demands of data centers, seeking to integrate computing capacity with electricity availability and decarbonization goals.
Public procurement is part of the response. In April, the Commission awarded contracts worth up to €180 million for sovereign cloud services for EU institutions. Brussels says the move can help turn the public sector into an anchor customer for European providers, though it cannot match the scale of U.S. hyperscaler investment.
The Skills and Infrastructure Bottleneck
Sixty percent of EU companies report difficulties hiring qualified workers in artificial intelligence, cybersecurity and clean technologies, according to the European Parliament. Henna Virkkunen, executive vice president of the Commission responsible for Technological Sovereignty, Security and Democracy, said: "We are living through a global digital revolution and a worldwide race to shape the future of artificial intelligence. Europe must not be content to participate in this transformation; it must lead it."
A GSMA Intelligence study published in May says Europe will need €475 billion in investment in mobile networks by 2035 to complete its 5G rollout and regain digital leadership. Under current conditions, European operators are expected to mobilize only about €270 billion, leaving an investment gap of €205 billion.
Barbara Moens, writing in the Financial Times in late May, described Europe's shift from a strategy focused mainly on regulating large technology companies toward one aimed at fostering European alternatives in semiconductors, cloud computing and artificial intelligence. She said Europe must "reclaim its place in the global race for geoeconomic power."
Why This Matters:
Europe's digital dependence isn't just a competitiveness problem — it's a question of democratic control over critical infrastructure. When hospitals, energy grids and public services run on foreign-owned platforms, governments lose the ability to set their own rules, protect citizens' data, and ensure continuity during geopolitical crises. The sovereignty package represents the EU's most ambitious attempt to build homegrown alternatives, but the investment gap remains enormous. Without massive public funding, stronger procurement policies, and a coordinated industrial strategy across member states, European cloud providers and AI developers will continue to fall behind. The skills shortage compounds the challenge: Europe can't build sovereign technology without workers trained to build it. Whether Brussels can mobilize the political will and financial resources to close these gaps will determine whether the EU remains a rule-taker in the digital economy or becomes a rule-maker with real alternatives to U.S. and Chinese dominance.