The European technological sovereignty package – a change in the EU’s approach to digital autonomy

The new set of measures on semiconductors, AI and cloud infrastructure aims to strengthen the EU’s position as an “AI continent”, while strategies on open-source and energy sustainability support implementation.

On 3 June 2026, the European Commission published a set of measures designed to reinforce the EU’s digital autonomy in key fields of technological development. Referred to as the “European technological sovereignty package” (“ETSP”), the policy update forms part of the EU’s broader efforts to increase digital autonomy and reduce reliance on suppliers outside of the Single Market. At the same time, the proposals aim to strengthen the EU’s position as an AI continent and continue the trend towards simplifying administrative burdens and corporate compliance requirements, particularly for small and medium-sized enterprises.

In this context, the ETSP introduces the following measures, all aimed at enhancing digital autonomy:

• A proposal for the Chips Act 2.0 (“CA2”), addressing the growing reliance on semiconductors for data centres, cloud services and AI development.
• A proposal for a Cloud and AI Development Act (“CADA”) aimed at supporting technological development while reducing dependence on providers outside the EU.
• A strategy on open-source software and a roadmap for the integration of digital infrastructure within the energy sector.

Following the Commission’s AI continent action plan, the ETSP aims to accelerate progress towards a more sovereign technological infrastructure for core EU services.

While the legislative proposals remain subject to negotiation and adoption by the European Parliament and the Council, the Commission’s current plans would have a direct impact on the private sector, with certain provisions tailored for small and medium-sized enterprises (“SMEs”). These initiatives complement recent EU efforts, such as the digital omnibus, which focus on reducing administrative burdens where possible.

1. A sovereign basis for digital infrastructure – Chips Act 2.0

Given that the global economy is heavily dependent on semiconductor technology, the EU aims to reduce its dependence on suppliers from third countries. CA2 builds on its predecessor and seeks to address structural vulnerabilities in the EU’s position in this market, particularly during crisis scenarios. From a general perspective, CA2 is intended to improve conditions for investments and strengthen the EU’s role in the semiconductor value chain, reducing exposure to market disruptions. This includes support for production within the EU through the introduction of the Chips for Europe Initiative 2.0. Broadly, the Initiative aims to strengthen procurement procedures for semiconductors manufactured in the EU, expand testing and experimentation facilities, support the development of quantum chips and photonic technologies and facilitate access to finance through clear guidance particularly for start-ups, scale-ups, small mid-caps and SMEs.

In practical terms, the measures include support for research, development and innovation, faster permitting through time-limited procedures for manufacturers and the creation of a business-to-business platform to enhance transparency and resilience within the market. In addition, CA2 would introduce a “semiconductor regions of excellence” label to increase the attractiveness of investment in selected areas. Certain information-sharing obligations are foreseen for the private sector, although SMEs are excluded. This reflects a coordinated legislative approach aimed at reducing compliance burdens and supporting business growth.

Increased cooperation and innovation under the framework may also stimulate demand, benefitting smaller businesses.

The expansion of manufacturing capacity is accompanied by simplification measures targeting administrative processes. From a public sector perspective, the EU also seeks to strengthen its position in supply chains, particularly in sectors identified as high risk by the Commission. CA2 further establishes mechanisms for monitoring and crisis response, including measures to prevent or mitigate semiconductor shortages.

Undertakings operating within the semiconductors value chain and active within the European market may therefore be subject to specific regulatory obligations. For example, the Commission may request information to assess risks of supply chain disruption. During crisis situations, such requests may extend to production capabilities, capacities and existing disruptions. Where requests for information originate from third-country authorities, undertakings must notify the Commission without delay. During a crisis stage, the Commission may also issue priority-rated orders of crisis-relevant products. If similar requests are made by third countries, the Commission must again be informed promptly.

The Commission would also be empowered to impose penalties for non-compliance, including:

• A maximum of EUR 300,000 for supplying incorrect, incomplete or misleading information in response to a request in the context of a semiconductor shortage.
• A maximum of EUR 150,000 (or EUR 50,000 for SMEs) for failing to inform the Commission of enquiries from third countries regarding semiconductor activities.
• Periodic penalties of up to 1,5% (or 0,5% for SMEs) of the current daily turnover for each working-day of non-compliance with obligations to prioritise production of crisis-relevant products.

2. An AI continent grounded in the cloud – Cloud and AI Development Act

The deployment of AI relies on data centres and processing capacity supported by robust cloud infrastructure. The EU currently remains dependent on non-EU operators in this market, similar to the semiconductor sector. CADA seeks to address this dependence by establishing definitions of EU cloud and AI sovereignty and by pursuing three main objectives:

• Supporting innovation through increased funding and prioritising open-source solutions for cloud and AI infrastructure.
• Accelerating the deployment of data centres through administrative simplification, the designation of data centre acceleration zones and strategic projects and enhanced cooperation between Member States.
• Establishing an EU framework for cloud and AI sovereignty, including the federation of public sector resources and regulatory measures targeting private actors in the essential sectors listed in Annex I of the NIS 2 Directive.

Although increased digital activity may lead to higher resource consumption, the Commission considers that CADA could contribute to reducing the EU’s carbon footprint in the data centre sector through improved efficiency and sustainability measures.

Similar to CA2, CADA also aims to strengthen business capabilities by simplifying processes and lowering barriers to market entry. In particular, it is expected to create opportunities for EU-based providers by reducing reliance on non-EU operators.

3. An integrated approach through non-binding measures – open-source strategy and energy sector roadmap

Complimenting CADA and CA2, the open-source strategy is intended to support the sustainability of open-source technologies across their lifecycle. For the private sector, an improved environment for open-source developments may reduce entry barriers and promote innovation. The strategy targets the open-source ecosystem through several measures:

• Promoting open-source solutions in EU policymaking.
• Strengthening cooperation with Member States through the adoption of open-source solutions in public services.
• Providing guidance on public procurement for open-source investments.
• Supporting the development of open-source technologies in critical sectors.
• Ensuring long-term maintenance and the development of relevant skills needed for open-source technologies.

Regarding the strategic roadmap for digitalisation and AI in the energy sector, the Commission sets out plans to significantly expand data centre capacity within the EU over the coming years. At the same time, it recognises that data centres currently account for approximately 2.5% of the EU’s electricity consumption The roadmap therefore focuses on the sustainable integration of data centres and AI into the energy system, including measures such as: establishing minimum energy performance standards, improving grid planning through enhanced information exchange, enabling flexible connection agreements, using AI for smart grid optimisation, developing EU-wide key performance indicators and enhancing interoperability.

The ETSP represents a step towards strengthening the EU’s technological autonomy in key sectors. From a practical perspective, it will be interesting to see how the provisions of CA2 and CADA are applied in practice, assuming that they pass through negotiations successfully and the extent to which digital sovereignty becomes a reality for the EU. Nonetheless, their legislative development should be closely monitored in order to align early with compliance obligations and coordinate with other requirements within the EU’s technological framework.