The European Commission on Wednesday proposed a raft of rules aimed at strengthening homegrown chips, AI and cloud services as the European Union scrambles to develop technological sovereignty amid heavy reliance on products and services from the United States and China.
The proposal, which must be approved by all 27 member states, includes new measures to boost advanced chip manufacturing and domestic cloud computing.
Amid rising geopolitical tensions around the world, there are increasing calls from key technology providers outside Europe to diversify into Europe, including the US technology companies that currently dominate the European market.
“We cannot rely on others to provide the technology to keep our hospitals running, our energy grid stable and our services safe,” Commission President Ursula von der Leyen said in a statement.
“Kill Switch”
As part of the proposal, the Cloud and AI Development Act (CADA) will be introduced to “reduce the risks arising from the EU’s dependence on third countries for cloud computing services” by introducing an EU-wide framework setting out the different levels of sovereignty required for cloud computing of sensitive public sector workloads, according to a commission press release.
The European Commission aims to ensure that cloud providers for critical workloads do not have “kill switches,” Executive Vice President Hena Virkunen told reporters.
He added that it will be difficult for U.S. companies to reach the highest level of sovereignty because of the U.S. Cloud Act, which allows U.S. law enforcement to request user data from U.S. companies regardless of where the data is stored.
“We want to ensure that our most important sensitive data is stored in Europe,” she said.
CNBC previously reported that the European Union is considering rules that would restrict member governments’ handling of sensitive data from U.S. cloud providers.
Catherine Di Lorenzo, a partner at A&O Sherman, told CNBC that CADA is a “significant change.”
“The direction of travel already goes far beyond data residency and includes ownership structures, extraterritorial exemptions, operational management and supply chain transparency,” she said.
reinforced chip
A second law aimed at strengthening Europe’s semiconductor sector, called Chip Law 2.0, was also announced. The first law introduced a range of measures aimed at securing the supply of semiconductors and increasing the EU’s global market share.
According to the proposed regulation, the new law aims to address over-reliance on third countries for chip design and manufacturing and a lack of crisis preparedness.
The Chip Act 2.0 aims to build cutting-edge semiconductor technology capabilities to power AI. The commission said it would “prioritize” the construction of foundries with advanced semiconductor manufacturing capabilities in the region.
Keegan McBride, director of science and technology at the Tony Blair Global Change Institute (TBI), told CNBC: “This package is an important step. In the age of AI, access to computing power, energy, talent and digital infrastructure will determine which countries thrive.”
“But a complete retreat to a Europe-first technology approach would weaken the continent,” he added. “Big countries must not only use technology domestically, but also have global ambitions to build, deploy and export their technology to the rest of the world. At the moment, Europe is not doing this.”
