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EU proposes Chips Act 2.0 and cloud law to cut reliance on US tech

EU proposes Chips Act 2.0 and cloud law to cut reliance on US tech

Rule Changes

Brussels wants tripled data-centre capacity, faster chip permits, and protection from foreign 'kill switches'

Today: EU unveils Technological Sovereignty Package

Overview

The European Union depends on non-EU suppliers for more than 80% of its core digital products. On 3 June 2026, the European Commission proposed two laws to change that: a Chips Act 2.0 to boost semiconductor production, and a Cloud and AI Development Act to triple the bloc's data-centre capacity within five to seven years.

Three US firms — Amazon, Microsoft and Google — run about 70% of Europe's cloud market. Brussels wants European alternatives in place before a foreign government or company can, in the words of EU tech chief Henna Virkkunen, 'flip a kill switch' on hospitals, fighter jets or government systems. The proposals now go to the European Parliament and the 27 member states, where France and Germany want stricter EU-only rules and the Nordics and Ireland want a lighter touch.

Why it matters

If these laws pass, US hyperscalers face new curbs in Europe, and European chipmakers get a 12-month permitting fast track worth tens of billions in state aid.

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Key Indicators

70%
US share of EU cloud market
AWS, Microsoft Azure and Google Cloud together run roughly seven in ten EU cloud workloads.
<10%
EU share of world chip output
Europe makes under a tenth of global semiconductors and almost none of the most advanced nodes.
80%+
EU reliance on non-EU digital tech
Share of core digital products, services and IP the bloc imports from outside Europe.
3x
Data-centre capacity target
CADA aims to at least triple EU data-centre capacity within five to seven years.
€120B
Chips Act 2.0 investment target by 2035
Combined public and private investment goal across member states and industry.
12 months
Max permitting time for chip projects
Chips Act 2.0 caps national permitting at one year for qualifying semiconductor sites.

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People Involved

Organizations Involved

Timeline

June 2020 June 2026

7 events Latest: Today
Tap a bar to jump to that date
  1. EU unveils Technological Sovereignty Package

    Today Legislation

    Commission proposes Chips Act 2.0, the Cloud and AI Development Act, an Open Source Strategy and an energy AI roadmap.

  2. Commission previews demand-side chip strategy

    Statement

    EU officials brief that Chips Act 2.0 will lean harder on guaranteed European buyers, not just subsidies for fabs.

  3. US Section 232 chip tariff takes effect

    External pressure

    A 25% tariff on a narrow band of advanced chips re-exported to the US starts, hitting EU buyers and sellers.

  4. Trump signals 25% semiconductor tariffs

    External pressure

    President Trump says US chip tariffs will start at 25%, sharpening EU concerns about supply chain exposure.

  5. Commission forecast shows EU chip share will fall short

    Analysis

    Internal projection puts the EU's share of advanced chip output at 11.7% by 2030, well below the 20% target.

  6. Original European Chips Act enters into force

    Legislation

    The 2023 act targets €43 billion in public investment and a 20% global share of cutting-edge chips by 2030.

  7. GAIA-X launched as Europe's cloud answer

    Background

    France and Germany unveil GAIA-X, a federated cloud project meant to cut dependence on US hyperscalers. It later struggles to deliver production services.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

June 2020

GAIA-X cloud sovereignty project (2020)

France and Germany launched GAIA-X to build a federated European cloud as a counterweight to AWS, Microsoft and Google. AWS, Microsoft and Google were soon admitted as members, and the project never shipped production services at scale. EU providers' share of the European cloud market fell from 26% in 2017 to about 10% by 2020.

Then

GAIA-X became a standards and certification body rather than a working cloud. Germany pulled funding from several pilot projects.

Now

Hyperscalers entrenched their position. Brussels concluded that voluntary federation could not deliver sovereignty, which set the stage for a binding law like CADA.

Why this matters now

CADA is the legislative answer to the policy lesson Brussels drew from GAIA-X: federation and labels did not move market share, so the 2026 package leans on hard rules, public procurement and capital.

September 2023

European Chips Act 1.0 (2023)

The original Chips Act mobilised more than €43 billion in public and private money to lift Europe's share of cutting-edge chip production to 20% by 2030. By 2024, the Commission's own forecast put the likely share at 11.7%, and the European Court of Auditors said the 20% goal was out of reach.

Then

Some flagship projects, such as Intel's planned Magdeburg fab, were delayed or scaled back. State aid approvals reached only about €13.75 billion by early 2026.

Now

The Commission concluded the original act was too supply-focused and lacked guaranteed European demand for the chips it subsidised.

Why this matters now

Chips Act 2.0 is the explicit course correction: faster permitting, a demand-side push from European buyers, and a stated 'priority' for an advanced foundry inside the EU.

December 1970

Airbus consortium (1970)

France, Germany and later the UK and Spain pooled state money and industrial capacity to build a European passenger jet maker to rival Boeing and McDonnell Douglas. The A300 launched in 1974 after years of political and funding fights. Member states accepted joint procurement and long-term subsidies in exchange for European industrial control.

Then

Slow A300 sales nearly killed the project, but state-backed orders kept it alive.

Now

Airbus became one of two global commercial jet makers and is now Europe's flagship case of successful industrial sovereignty.

Why this matters now

Airbus is the model EU sovereignty advocates cite when arguing that Europe can build globally competitive industries if it accepts joint subsidies, joint procurement and a long horizon. Critics counter that chips and cloud move faster than aerospace and may not give Brussels that runway.

Sources

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