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EU Formally Launches Tech Sovereignty Package: Chips Act 2.0, €200B Data Centre Build, and €2B for Open Source

The European Commission published the European Technological Sovereignty Package on June 3, 2026 — four linked proposals that together represent the EU’s most direct legislative response to dependence on US and Chinese technology stacks. The package introduces legislation and strategy across semiconductors, cloud infrastructure, open-source software, and AI in energy.

The Four Pillars

Chips Act 2.0 targets a doubling of EU global semiconductor market share from roughly 10% to 20% by 2030, at an estimated cost of €120 billion. The proposal accelerates permitting, supports strategic investments, and deepens links between chip manufacturing and the growing AI infrastructure ecosystem — including AI Gigafactories.

Cloud and AI Development Act (CADA) is the most substantive legislative proposal. It aims to triple EU data centre capacity from 12GW in 2025 to approximately 28GW by 2030, with a pathway to 65GW by the early 2030s. CADA introduces a single EU-wide sovereignty framework for government procurement: in sensitive sectors — defense, banking, healthcare, energy — procurement of cloud and AI services must use EU-origin software and hardware. AWS, Azure, and Google Cloud are directly in scope for that exclusion. The Act also creates Experience and Acceleration Centres to drive enterprise AI adoption.

EU Open Source Strategy commits approximately €2 billion over seven years to fund and maintain critical open-source projects. It establishes “public money, public code” — software developed with public funding is released openly. It institutes an “open source first” principle for public sector procurement, though not a mandate. European foundations would be supported to steward key projects. The strategy explicitly reframes open source as sovereignty infrastructure requiring sustained investment, not free software that maintains itself.

Energy + AI Roadmap links digital infrastructure to Europe’s energy system. Data centres currently consume roughly 2.5% of EU electricity. The Commission proposes AI models for the energy sector trained on European data by European companies — explicitly analogous to the sovereign AI rationale in defense and healthcare.

The Numbers

  • €200 billion in private investment targeted by 2036 (mostly for data centres)
  • €100 billion additional for Cloud and AI leadership initiatives and Gigafactories
  • €120 billion estimated for Chips Act 2.0 semiconductor targets
  • €2 billion over seven years for the Open Source Strategy
  • EU semiconductor market share target: 10% → 20% by 2030
  • EU data centre capacity: 12GW (2025) → 28GW (2030) → 65GW (2033)

The Commission notes the EU currently spends €264 billion annually — mostly on US proprietary IT products and services. The €2B open source commitment over seven years is roughly three days of that annual spend.

What Shifts

CADA represents the most significant procurement mechanism in the package. The cloud sovereignty assessment framework for sensitive sectors creates a structural preference for European providers — or for on-premises infrastructure outside US hyperscaler control — in government workloads. Major procurement decisions in EU member states for health, finance, defense, and energy applications will require formal sovereignty assessments once the Act is in force.

The Open Source Strategy is a structural change in how the Commission approaches software dependency. The 2024 Draghi report mentioned “open source” twice in 412 pages. The June 3 strategy uses it nearly 300 times in roughly a tenth of the space. The strategic framing has moved from cost reduction to sovereignty, which changes what gets funded and why.

The European Parliament, separately, announced it is switching its default search engine from Google to Qwant as part of broader digital tool sovereignty measures. Former Siemens chairman Jim Hagemann Snabe was appointed special envoy for industrial AI.

Process

Chips Act 2.0 and CADA must both clear the European Parliament and the Council before becoming law. The package builds on the Competitiveness Compass and Economic Security Strategy, and is linked to the EU AI Act enforcement timeline (full enforcement begins Q3 2026). The sovereignty assessment framework in CADA will interact directly with AI Act compliance obligations for frontier model providers operating in the EU.