The European Union is set to unveil an ambitious new technology sovereignty agenda Wednesday aimed at reducing the bloc’s dependence on U.S. and Chinese technology providers, marking the latest phase in Brussels’ effort to strengthen Europe’s position in the global digital economy.
The initiative, known as the European Tech Sovereignty package, is expected to include measures to expand domestic semiconductor manufacturing, promote open-source technology alternatives, and encourage governments across the 27-member bloc to reassess their reliance on foreign cloud computing and artificial intelligence providers, according to a report by Tech Policy Press.
The proposal arrives as European policymakers increasingly frame technological capabilities as a matter of economic competitiveness and strategic security. The rise of generative AI, growing geopolitical tensions, and concerns about Europe’s dependence on foreign digital infrastructure have intensified calls for the EU to develop stronger domestic technology industries. As European Commission President Ursula von der Leyen said earlier this year, “The world has changed permanently. And we need to change with it.”
The sovereignty package is also part of a broader shift underway in Brussels. For much of the past decade, the EU has focused on establishing itself as the world’s leading technology regulator through landmark legislation such as the Digital Markets Act, Digital Services Act, Data Act and AI Act. Those measures have reshaped global compliance requirements and generated substantial penalties for major technology firms, but critics have argued that regulation alone has not produced globally competitive European technology champions.
That debate has become increasingly prominent since former Italian Prime Minister Mario Draghi released a widely discussed competitiveness report in 2024. Draghi urged European policymakers to significantly increase investment in strategic technologies while reducing regulatory burdens that may hinder innovation and investment. The new sovereignty agenda appears designed to implement many of those recommendations by pairing industrial policy with efforts to streamline parts of the EU’s digital rulebook, per Tech Policy.
Among the most significant expected measures is a proposed “Chips Act 2.0,” which would build on the EU’s earlier semiconductor initiative by linking support for advanced chip production to increased investment in European cloud computing infrastructure. The goal is to strengthen multiple layers of the digital technology stack simultaneously rather than treating semiconductor manufacturing as a stand-alone policy objective.
The package is also expected to include a Cloud and AI Development Act that would require member states to conduct “sovereignty risk assessments” examining the extent to which critical infrastructure depends on technology supplied by non-European companies. Governments would then determine whether portions of that infrastructure should migrate to European providers for economic or security reasons.
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Such assessments could have significant implications for U.S. cloud providers. According to a December 2025 European Parliament study, Amazon, Google and Microsoft currently control roughly 70% of the European cloud market. The sovereignty initiative could therefore channel substantial public and private investment toward European alternatives.
A third pillar of the strategy would promote wider adoption of open-source technologies and standards to reduce dependence on proprietary services offered by a small number of global technology companies. Supporters argue that open-source solutions can improve interoperability, competition and technological independence.
The proposal also highlights an increasingly delicate balancing act for Brussels. EU officials continue to reject accusations from U.S. policymakers that Europe’s digital agenda is protectionist, arguing instead that the bloc is seeking to create fair competition and reduce strategic vulnerabilities. Yet the sovereignty package reflects a broader global trend toward economic nationalism and industrial policy as governments seek greater control over critical technologies.
For businesses operating in Europe, the initiative signals that the next phase of EU technology policy may place as much emphasis on building European digital capacity as on regulating global technology firms. The challenge for Brussels will be translating those ambitions into investment, innovation and market share gains that previous efforts have struggled to deliver.
