Its new European Technological Sovereignty Package, announced on June 2, brings together two legislative proposals, the Chips Act 2.0 and the Cloud and AI Development Act, alongside an EU Open Source Strategy and a Strategic Roadmap for Digitalisation and AI in Energy. The package is designed to reduce Europe’s reliance on non-EU providers for critical digital infrastructure while expanding domestic capacity in semiconductors, cloud, AI, data centers, open source, and energy-aware digital systems.
The Commission’s communication states the EU remains structurally reliant on non-EU providers for more than 80% of digital products, services, infrastructure and intellectual property. It also says Europe produces only around 10% of global semiconductors, while more than 70% of the EU cloud market is held by three US hyperscalers.
Commission President Ursula von der Leyen framed the package around critical infrastructure. “We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable, and our services secure,” she said.
For ERP leaders, the package matters because sovereignty is moving from legal and procurement language into the architecture of enterprise systems. Cloud location, AI compute, chip supply, open source adoption, data center sustainability, and energy integration are becoming part of how governments and regulated industries will evaluate technology platforms.
Analysis
What this means: EU sovereignty policy is closer to platform selection. The EU package pushes sovereignty into chips, cloud, AI, open source, data centers and energy systems. ERP vendors, hyperscalers and systems integrators serving European customers will need to show how their platforms address jurisdiction, data control, supply chain resilience, interoperability, and security.
Chips Act 2.0 Targets AI-Driven Semiconductor Demand
The Chips Act 2.0 builds on the first European Chips Act, which has been in force since 2023. The Commission says Europe still depends heavily on non-EU countries for advanced production and chip design, while AI-related components are expected to drive future semiconductor growth.
The proposal is designed to strengthen Europe’s semiconductor ecosystem across both mainstream and advanced chips. It includes faster permitting, deeper cooperation with trusted partners, a new excellence label for European semiconductor regions, and measures to connect chipmakers more closely with customers in growth sectors such as data centers, cloud providers, and AI Gigafactories.
Further, the Chips Act 2.0 reportedly will support strategic projects, including an EU-based open foundry for advanced semiconductor manufacturing to produce AI chips and other semiconductors with node sizes of 3 nanometres and below. Pilot production could be envisaged between 2030 and 2033.
For enterprise technology buyers, the chip proposal is not an abstract supply chain measure. AI infrastructure decisions increasingly depend on access to accelerators, processors, packaging capacity, and the broader hardware stack. If Europe succeeds in building more domestic and trusted supply, it could alter procurement options for AI, cloud, and industry-specific digital infrastructure over the next decade.
Cloud and AI Development Act Builds the Sovereign Compute Layer
The Commission says the Cloud and AI Development Act aims to triple data center capacity in Europe over the next five to seven years while supporting more sustainable and innovative facilities. It will also introduce a single EU-wide framework to assess cloud and AI sovereignty, while keeping most of the market open to like-minded partners.
The communication describes a Union cloud and AI sovereignty framework with four assurance levels. These levels will assess factors such as control over the service and software supply chain, processing of AI inference data, location of infrastructure, assets and personnel, and cybersecurity. Member States and EU entities will need to conduct sovereignty risk assessments to determine the necessary level of assurance for each use case.
That framework could become highly relevant for ERP, HCM, finance, public sector, and industry cloud deployments in Europe. Sovereignty requirements may increasingly shape which workloads can run on which cloud environments, which providers qualify for public sector or critical infrastructure use, and how vendors prove jurisdictional control over sensitive data and AI services.
The investment scale is also significant. The communication estimates that expanding data center capacity will require around EUR 200 billion (approximately $232.8 billion), mostly from the private sector, by 2036. It also cites another EUR 100 billion (approximately $116.4 billion) for cloud and AI leadership initiatives, including AI Factories and AI Gigafactories.
Analysis
What this means: Cloud decisions in Europe will face more structured sovereignty tests. The Cloud and AI Development Act’s planned assurance framework could influence how public sector, regulated industry, and critical infrastructure buyers evaluate cloud and AI services. Enterprise architects should expect sovereignty risk assessments to become more relevant in platform selection, workload placement, and AI governance.
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Open Source Becomes a Sovereignty Lever
The EU is also making open source a central part of its sovereignty strategy.
The Commission says Europe is home to more than 3 million open source contributors. Its Open Source Strategy is designed to scale alternatives in priority areas including cloud, AI, internet technologies, cybersecurity, and semiconductors. The strategy also aims to increase open source use in public administrations through procurement guidance, best practices, skills investment, startup support, and long-term maintenance and security measures.
Existing open source initiatives include:
- The Next Generation Internet initiative mobilized about EUR 190 million (approximately $221.2 million) through Horizon 2020 and Horizon Europe and funded more than 1,700 grassroots projects.
- Simpl, a EUR 156 million (approximately $181.6 million) open source software initiative to operate data spaces and allow Member States to share computing infrastructure through EuroCloud.
The open source strategy connects sovereignty to interoperability and vendor lock-in. Open source is being positioned as a way to reduce dependency on proprietary non-EU technology, improve auditability, support standards, and create reusable digital building blocks for public and private sector systems.
This will not remove proprietary enterprise platforms from the European market. It does, however, create pressure for vendors to demonstrate openness, portability, compliance with EU values, and integration with public digital infrastructure.
Analysis
What this means: Open source is moving from developer preference to policy instrument. The Commission is positioning open source as a way to reduce lock-in, improve transparency and build European alternatives across the technology stack. ERP and application vendors operating in Europe may face stronger demand for open standards, auditable components, portability, and compatibility with European digital public infrastructure.
Energy Roadmap Links AI Growth to Grid Pressure
The package also acknowledges the energy constraint behind Europe’s AI ambitions.
The Strategic Roadmap for Digitalisation and AI in Energy is designed to integrate data centers into Europe’s energy system in a sustainable and transparent way. The Commission said it will facilitate cooperation between energy and digital sectors to improve grid integration, secure clean energy supply, and protect water and energy resources.
The roadmap also aims to accelerate digital and AI solutions for Europe’s electricity infrastructure, including smarter grids, faster smart meter rollout, and AI models for the energy sector trained on European data and developed by European companies.
This is where the tech sovereignty package connects directly to industrial competitiveness. AI infrastructure requires power, and Europe’s high energy costs already affect competitiveness in energy-intensive technologies such as cloud and AI. The Commission’s package treats compute capacity, data center deployment, and energy planning as linked issues.
