The European Commission has unveiled an ambitious technology policy package designed to strengthen Europe’s control over critical digital infrastructure, positioning semiconductors, artificial intelligence, cloud computing and open-source software at the center of the bloc’s long-term economic strategy. The initiative, known as the Technological Sovereignty Package, combines proposed legislation and policy frameworks intended to reduce Europe’s dependence on foreign technology providers while accelerating domestic investment in strategic digital capabilities. The package includes the proposed Chips Act 2.0, the Cloud and AI Development Act, a revised Open Source Strategy and a dedicated roadmap focused on digitalisation and AI deployment across the energy sector.
The announcement arrives as governments worldwide race to secure semiconductor supply chains, build sovereign AI infrastructure and address mounting energy demands created by rapidly expanding data center ecosystems. European policymakers increasingly view technology infrastructure as a strategic asset tied directly to economic security, industrial competitiveness and geopolitical resilience. The Commission’s latest proposals seek to establish a coordinated framework that supports advanced manufacturing, cloud infrastructure development and AI adoption while ensuring Europe retains greater control over critical digital systems.
Chips Act 2.0 Seeks Stronger European Semiconductor Position
A major pillar of the package is Chips Act 2.0, which builds on the European Union’s original semiconductor strategy introduced in 2023. The Commission believes Europe remains heavily reliant on external suppliers for advanced chip design and manufacturing despite previous efforts to strengthen domestic capabilities. Under the new proposal, authorities plan to accelerate permitting procedures for semiconductor projects, deepen collaboration with strategic partner nations and introduce a quality certification mechanism for semiconductor-focused regions. Policymakers also aim to strengthen relationships between chip manufacturers and demand-driving industries, particularly AI infrastructure operators and data center developers.
The Commission estimates that AI-related components will represent more than 70% of the global semiconductor market by 2030. That forecast reflects how rapidly AI workloads are reshaping demand patterns across compute infrastructure, creating urgency for regions seeking greater technological self-sufficiency. European leaders increasingly view semiconductor capacity as foundational infrastructure that influences everything from industrial productivity and cloud services to national security and digital competitiveness.
Cloud and AI Development Act Targets Major Capacity Expansion
Alongside semiconductor investments, the proposed Cloud and AI Development Act outlines a significant expansion strategy for Europe’s digital infrastructure footprint. The legislation forms part of the broader AI Continent Action Plan and establishes a target of tripling European data center capacity over the next five to seven years. Such growth would represent one of the largest infrastructure expansion efforts undertaken by the bloc as AI adoption accelerates across public and private sectors.
The Commission also intends to simplify approval processes for new data center developments and encourage construction of more sustainable facilities. In addition, policymakers want to create a unified European framework for assessing cloud and AI sovereignty risks while maintaining open markets for trusted partner countries. Officials argue that balancing openness with strategic autonomy will become increasingly important as AI systems handle larger volumes of sensitive data and support mission-critical services across industries.
European Leaders Frame Digital Infrastructure as Strategic Necessity
European leaders used the announcement to highlight the growing connection between technology infrastructure, economic resilience and energy security. Ursula von der Leyen, Commission President, said, “We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure, together we must turn these strengths into technological sovereignty.”
Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, said, “Today’s package marks a major shift in how Europe approaches technological sovereignty. It is time for Europe to be in control of its data, of its supply chains, and of its future in a clean and sustainable way. We are strengthening Europe’s digital autonomy and resilience while keeping our economy open to partners around the world.” The statements underscore a broader policy shift taking place across Europe, where technology infrastructure increasingly sits alongside energy, transportation and defense as a strategic priority.
Energy Strategy Addresses Growing Data Center Demand
The package also confronts a challenge emerging across major digital economies: the rising electricity requirements associated with AI infrastructure and large-scale data centers. Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, said, “Digitalisation of the energy system is Europe’s chance to get more from the same infrastructure we have and reduce bills for consumers. This package seizes that chance and ensures surging demand from data centers works with the grid, not against it, so Europe’s digital ambition powers the energy transition rather than competing with it.”
Dan Jørgensen, Commissioner for Energy and Housing, said, “These technologies are transforming how we live, work, and power our economies. Europe must not simply participate in this transformation, it must lead it. But leadership means doing so in a way that reflects our values: responsibly, sustainably, and for the benefit of all consumers and sectors. Our task is clear: to manage the growing energy demands of digitalisation.”
The accompanying energy roadmap proposes closer cooperation between energy providers and digital infrastructure operators to ensure that power grids can support future growth. The Commission also plans to accelerate deployment of smart meters, encourage AI-enabled energy management systems and expand cross-border energy data sharing initiatives. Furthermore, policymakers want AI models designed specifically for energy applications to be developed within Europe using European datasets, reinforcing the sovereignty objectives embedded throughout the broader package.
Open Source Strategy Expands Europe’s Digital Foundation
The revised Open Source Strategy represents another cornerstone of the initiative. European officials see open-source technologies as a critical layer supporting cloud platforms, cybersecurity systems, AI development environments and semiconductor innovation. The strategy calls for increased investment in digital skills development, startup ecosystems and long-term maintenance of open-source infrastructure. It also encourages greater adoption of open-source technologies within public-sector procurement processes. By strengthening open-source capabilities, policymakers hope to reduce dependency on proprietary technologies while supporting innovation across Europe’s digital economy. The approach aligns with broader efforts to establish technological resilience through diversified and transparent technology ecosystems.
Financing and AI Gigafactory Plans Move Into Next Phase
The Technological Sovereignty Package now enters the legislative negotiation process, where members of the European Parliament and EU member states will review and debate the proposals before potential adoption. Meanwhile, the Commission plans to launch a call for AI Gigafactories in July and engage with the European Investment Bank and other stakeholders on funding mechanisms that can support strategic technology investments. The financing discussions will play a critical role in determining how quickly Europe can scale semiconductor manufacturing, cloud infrastructure and AI computing resources.
The package builds upon the EU’s AI Continent Action Plan as well as existing competitiveness and economic security initiatives. More importantly, it signals that European policymakers increasingly view compute infrastructure, semiconductor production and energy systems as interconnected assets that will shape the region’s economic position in the coming decade. For the data center and AI industries, the message is clear: Europe intends to play a larger role in building, powering and governing the digital infrastructure that underpins the next generation of technological growth.
