EU Unveils Tech Sovereignty Plan to Reduce Reliance on US Providers

The proposal, described by EU officials as a technology sovereignty initiative, reflects mounting concern in Brussels that Europe’s reliance on U.S.-based technology providers has become both an economic vulnerability and a national security risk.

At the center of the package are new efforts to expand European data center capacity, bolster semiconductor production and encourage governments and businesses to purchase technology from European suppliers. The initiative also contemplates limiting the ability of non-European cloud providers to win contracts involving sensitive government functions and public-sector data.

“We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure,” European Commission President Ursula von der Leyen said in a statement accompanying the proposal.

European officials have increasingly warned that dependence on foreign technology providers creates what some policymakers describe as a potential “kill switch” risk, under which access to critical digital services could be disrupted by future political disputes or government actions. The European Commission said the bloc currently relies on foreign providers for more than 80% of its digital products, services, infrastructure and intellectual property. American companies, including Amazon, Google and Microsoft, dominate Europe’s cloud-computing market, while much of the semiconductor supply chain remains concentrated in the United States and Asia.

The initiative also reflects a broader shift in European industrial policy. After more than a decade focused largely on regulating major U.S. technology platforms, European policymakers are increasingly emphasizing measures designed to build domestic technology champions capable of competing globally.

“The European Union stands at a defining moment to assert its technological sovereignty and reclaim its place in the global race for geoeconomic power,” the European Commission said in the proposal.

A key component of the package is the proposed Cloud and A.I. Development Act, which would support European cloud providers and reserve certain sensitive government workloads for providers meeting European sovereignty requirements. The proposal also seeks to accelerate data center construction through faster permitting, more reliable access to electricity and public investment. Brussels has set a goal of at least tripling European data-center capacity by 2030.

The package also includes a “Chips Act 2.0” intended to increase demand for semiconductors produced within Europe and build on the bloc’s earlier efforts to strengthen domestic chip manufacturing. Additional measures under consideration include direct government investment in strategic technology companies in exchange for equity stakes, particularly in semiconductor and advanced-manufacturing sectors.

The proposal is expected to benefit a range of European technology companies, including German software giant SAP, French AI developer Mistral and French cloud-computing provider OVHcloud. European institutions are already beginning to shift procurement decisions toward domestic suppliers. On Wednesday, the European Parliament announced that it would replace Google’s search engine with the French provider Qwant.

The initiative has drawn criticism from U.S. industry groups, which argue that the measures discriminate against foreign technology providers and could reduce competition. The Computer and Communications Industry Association, whose members include major U.S. technology companies, called the package “discriminatory” toward firms headquartered outside Europe.

“By excluding trusted international technology providers based on their headquarters location and organizational structure, the commission forces users to rely on a much more limited selection of digital products,” the association said in a statement.

The Commission’s proposal must still wend its way through the EU political process, involving negotiations with member countries represented by the Council of Europe, and the elected European Parliament. That will likely delay any implementation of the Commission’s agenda until well into 2027.