The package will boost homegrown tech services, including open source tech, with the aim of increasing choice for users. It includes two legislative proposals as well as an Open Source Strategy and a Strategic Roadmap for Digitalisation and AI in Energy.

The Tech Sovereignty Package provides a long-term focus on measures aimed at helping European companies grow into serious contenders to both US and Chinese tech. As Europe is very dependent on especially, US tech today, the package underlines that it is not about isolation from the US, but:

“It is designed to reduce structural dependencies and make sure Europe can develop, deploy, and secure the technologies Europeans rely on. It signals a major shift in the EU’s approach to technology.”

The shift means moving away from mainly regulating the tech giants (not that it will change a lot) to building, growing, and buying European tech. The strategy contains 4 focus areas.

Building Europe’s Cloud and AI Capacity

The Cloud and AI Development Act  will support research and innovation in cutting-edge and sustainable technologies, while balancing AI ambitions with climate commitments. This means that data centers will get preferential treatment if they have a highly sustainable focus. The EU Commission plans to triple European-owned data centers in capacity over the next few years. It is a huge challenge that might not rhyme with the climate ambitions of the European Parliament. Further, the package – with such a big bet on AI – shows that the Commission agrees with the generative AI hype from commerical tech companies in Silicon Valley.

The Act will also introduce a single EU-wide framework to assess cloud and AI sovereignty and define what ‘digital sovereignity’ is to avoid sovereignity washing – meaning cloud services marketed as sovereign, when legal jurisdiction or operational control still sits outside Europe.

Strengthening Digital Autonomy Through Open Source

Today, Europe spends €260+ billion annually, mostly on US proprietary solutions. With a new Open Source Strategy, the plan is to boost EU’s own tech sector with open source tech and keep some of that money to buy homegrown services and thus grow a European tech sector. Also China is betting high on open source tech in Generative AI. The strategy (page 16) says:

“Open source crucially contributes to achieving the EU’s technological sovereignty, as it
often underpins key areas, such as critical communication, commerce, healthcare, scientific
research and government services. Europe, the birthplace of Linux, is home to a strong and
vibrant community of over 3 million open source contributors, delivering digital solutions
aligned with European principles and values.”

And further:

“The Commission will work together with the Member States and the private sector to:
i) support existing open source sovereign technology; and
ii) further develop open source solutions, in particular for critical technological areas.”

Securing the Semiconductor Base for Europe’s AI ambition

Semiconductors are essential for AI and for technologies Europeans use every day. The Chips Act 2.0 will build on Europe’s strengths, including in mainstream chips, and build capacity in cutting-edge semiconductor technologies that power AI applications. The Chips Act will speed up permitting, deepen cooperation with like-minded partners, and introduce a new excellence label for Europe’s semiconductor regions. Also, by adopting an ecosystem approach, it will bring European chipmakers closer to their customers and build on the demand of growth sectors, such as data centres, cloud providers and AI Gigafactories. Finally, it will support investment and strategic projects, while addressing vulnerabilities that could put supply at risk.

Digitalising Europe’s Energy System while ensuring Sustainable Digitalisation

The fourth pillar is a Strategic Roadmap for Digitalisation and AI in the Energy Sector which sets out how AI and other digital solutions can ensure the sustainable integration of digital infrastructure in our energy system, while at the same time help  make Europe’s energy system more efficient.

Financial Estimates

As regards the initiatives in the package, the investment needs for boosting the EU’s semiconductor ecosystem are, according to the Commission, estimated at an additional EUR 120 billion. Expanding data centre capacity will require around EUR 200 billion, mostly from the private sector, by 2036, plus another EUR 100 billion for the full realisation of the Cloud and AI leadership initiatives, as well as the deployment of AI Factories and Gigafactories. Finally, for all measures under the open source strategy, an estimated EUR 2 billion will need to be mobilised by the public and private sectors over the next seven years. For energy, the annual investment gap is estimated at EUR 400 billion.

The next step will be negotiations of the proposals from the EU Commission in the European Parliament and the Council of the European Union. The elected officials in the Parliament often tend to be critical of the hype from Silicon Valley.

Below is the ‘communication’ around the Open Source Strategy and the Financial Estimates of the whole package from the Commission.