No longer relying on the United States! The EU launches its strongest "technological sovereignty" plan, targeting chips, AI, and cloud computing.

```

The EU unveiled its most comprehensive technology sovereignty strategy to date on Wednesday, aiming to reduce reliance on US technology supply chains. According to reports, the strategy covers key areas such as semiconductors, artificial intelligence, and cloud computing. Core measures include the Cloud and AI Development Act (CADA) and Chip Act 2.0.

Henna Virkkunen, Executive Vice President of the European Commission, stated that the EU hopes to ensure there is no "kill switch" in key cloud service providers and emphasized that "dependencies can pose security risks." President Ursula von der Leyen also highlighted, "We cannot rely on others to keep hospitals running, maintain grid stability, and ensure service security."

If the plan is implemented, it will directly affect the market position of Amazon Web Services (AWS), Microsoft Azure, and Google Cloud in EU government sensitive data operations. Currently, these three companies together hold over 70% of the EU cloud computing market share.

Cloud Sovereignty Hierarchical Management: Entry Barriers for US Companies

The Cloud and AI Development Act (CADA) is the core legislation of this plan. According to the act, governments of member states must store critical data on cloud services entirely within the EU and require cloud service providers to undergo mandatory "sovereignty risk assessments." Providers are classified into four sovereignty levels based on whether cloud services, supply chains, data processing, and physical infrastructure are under EU control.

Vice President Virkkunen clearly stated that, because the US CLOUD Act allows US law enforcement agencies to access data stored by American companies overseas, US companies will find it difficult to obtain the highest sovereignty certification.

Faced with stricter regulatory environments, some US tech companies have begun to prepare in advance. Google and French electronics giant Thales SA jointly established the cloud company S3NS, which was recently selected by the European Commission as one of four enterprises providing cloud services to EU institutions. Microsoft and Amazon have also launched "sovereign cloud" solutions in Europe.

Catherine di Lorenzo, partner at law firm A&O Shearman, commented that CADA represents a "major shift": "Its scope goes far beyond data localization requirements and covers ownership structures, exemption from extraterritorial laws, operational control, and supply chain transparency."

Chip Act 2.0 Draft: Focus on Advanced Manufacturing, Boost Local Demand

In the semiconductor sector, the European Commission released the Chip Act 2.0 draft, an upgrade to the original act enacted in 2023. The original act aimed to address chip shortages during the pandemic and set a goal to double the EU's global market share by 2030, but last year EU auditors pointed out the goal was hard to achieve.

The key adjustment of the new act is: allowing the Commission to directly invest in large-scale cross-border projects, providing businesses a simplified public funding channel compared to applying for national subsidies; at the same time, it emphasizes boosting local demand to improve the economic viability of new semiconductor fabs. The Commission also stated it will "prioritize" building a wafer plant for advanced processes within the EU to support AI computing requirements.

In terms of funding, related investments will be executed through existing grant programs until 2028, after which sources of funding will await confirmation in the next EU budget round. According to Commission estimates, revitalizing the EU semiconductor industry by 2035 will require a total public and private investment of 120 billion euros (approximately 139 billion USD).

Effectiveness Takes Time: Legislation and External Risks Coexist

The European Commission admits that building local technology alternatives will be a long and arduous task. Executive Vice President Virkkunen said, "Eighty percent of Europe’s technology comes from abroad; capacity building in these fields cannot happen overnight." She expects significant results to emerge at the earliest by 2030.

Regarding the legislative process, the aforementioned drafts still need to undergo multiple rounds of negotiations between the governments of member states and the European Parliament, a process that could take several months. Notably, the proposal was originally set to be released in March this year, but was delayed multiple times due to opposition from national governments and criticism from the Commission’s supervisory body.

On external risks, the EU emphasizes that the plan "does not mean isolation, protectionism, or technological decoupling," but analysts remain cautious. Leonardo Quattrucci, adjunct professor at Sciences Po and digital policy expert, warned: "The EU does not have the capability to possess a complete AI technology stack. If standards are too strict, large companies will turn to other markets, trade partners may be alienated, and Europeans will not benefit from the best tools."

Risk Warning and DisclaimerMarkets have risks, investments must be cautious. This article does not constitute personal investment advice and does not take into account individual users' special investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their specific situation. Invest accordingly at your own risk. ```