Tech Sovereignty Package can strengthen Europe but must encourage investment more

The European Commission today unveiled its Tech Sovereignty Package, setting out new ambitions on AI, cloud and semiconductors.

Cecilia Bonefeld-Dahl, Director-General of DIGITALEUROPE, said:

“CADA’s cloud framework is a good starting point for a common European sovereignty and security standard. Europe needs one, just as the United States, Japan, India and China have one. We are glad it keeps markets open to innovative companies from allied partners, letting Member States determine the right risk level for the application at hand. Winning the technology race requires more focus on EU aggregated demand and procurement, companies need a large, scalable market and open access amongst trusted partners. Now let us make sure that we clarify governance, that it creates openness and minimum regulatory burden.”

We support the introduction of a risk-based model for highly sensitive, public sector cloud workloads, which follows the logic of other regions. The U.S., for example, has the Foreign Ownership, Control or Influence (FOCI) mitigation and FedRAMP authorisation to allow trusted providers to handle sensitive workloads if they meet strict control and security requirements, but procurement tenders and delivery remain open to companies from Europe and other trusted allies.

Strict China-style ownership control rules forced joint ventures or tender exclusions are not the way for Europe as an open democratic player.

CADA’s focus on safeguards across various metrics, and targeting most critical activities of public administration such as those linked to defense and justice is the way to go.

However, industry reminds policymakers that demand creation is the most efficient policy tool. Boosting Europe’s tech capabilities and closing the €800 billion investment gap can only be done by bold demand-side measures to complement supply-side efforts.

Recognising joint EU procurement for strategic challenges like protection of critical infrastructure would boost demand and have ten times more effect than restriction. Creating scalable, aggregated European demand on AI, cloud, semiconductors, satellites, drones, robotics and other critical and dual use areas must be in focus.

DIGITALEUROPE also supports CADA‘s focus on faster permitting and grid connection for data centres. Cloud services are now foundational to the systems people rely on every day, powering hospitals, public services, energy networks, factories and scientific discovery. Making the EU’s ambition to expand data centre capacity a reality will require the right investment conditions for the physical data centre infrastructure as well as enabling innovative and sustainable technologies that underpin the EU’s cloud, AI and digital economy, and its ambition to establish AI gigafactories.

The Chips Act 2.0 must make Europe a magnet for global investment. Semiconductor manufacturing in Europe is still 15 to 30%[1] more expensive than in leading Asian markets, making faster permitting, affordable energy and better coordinated EU support essential. Investment should focus on the full value chain, including areas like materials and equipment, where Europe can realistically lead, become indispensable and meet current and future demand.

Not least, we welcome the publication of a Strategic Roadmap for Digitalisation and AI in Energy. Europe is a global Energy Tech leader with European companies like Siemens, Siemens Energy, Schneider Electric, Nemetschek, Danfoss, ABB, Eaton and Holaluz, and we account for 27% of cleantech patents filed globally[2]. We now need the implementation of ambitious measures to leverage that strength and help bridge the €1.2 trillion investment needed in Europe’s grid infrastructure by 2040. Moving to a TOTEX approach will be essential to unlock this investment, enabling operators to choose the most efficient solutions while accelerating the uptake of digital innovations that are already available in our market today.

Smart grid indicators and modernised grid network tariffs are key to this. Despite EU rules, only one-third of Member States currently use network tariffs that allow utilities to recover the costs of digital and physical grid investments equally.

[1] https://www.zvei.org/fileadmin/user_upload/Presse_und_Medien/Publikationen/2026/Mai/20260521-ME-Studie/20260521_ZVEI_Mikroelektronik_Studie.pd

[2] European Patent Office, “Energy generation technologies”. Available at: https://www.epo.org/en/about-us/observatory-patents-and-technology/technologies/energy-generation-technologies