In the face of lagging behind in new industrial competition, the “patchwork” EU is growing anxious.
According to CCTV News, on June 3, the European Commission proposed new legislation—the “Cloud and AI Development Act” and the “Chip Act 2.0″—aimed at boosting the EU’s domestic cloud computing, AI, and semiconductor industries.
The EU currently consists of 27 member states with a population of approximately 450 million. It is the most integrated regional economy globally. Calculated in USD terms, the EU’s GDP was around $19.4 trillion in 2024, ranking second globally.
Due to long-term insufficient capital investment, shortages of talent, market fragmentation, and regulatory constraints, the EU’s digital technology progress has fallen far behind competitors like the United States.
As stated by European Commission President von der Leyen, the EU aims to reduce dependence on U.S. tech giants through these laws for technologies essential in areas like maintaining hospital operations, ensuring stable energy networks, and securing services.
Over the coming months, EU member states and the European Parliament will discuss these two proposals before they can become official laws. The legislation will still need review and negotiation by both the European Parliament and the Council of the EU before final adoption.
Specifically, the “Cloud and AI Development Act” sets sovereignty requirements for cloud service providers in sensitive sectors like banking, energy, and healthcare, partly out of concerns about U.S. laws like the Cloud Act.
The U.S. “Cloud Act,” formally known as the Clarifying Lawful Overseas Use of Data Act, was introduced during Trump’s first term as a landmark cross-border data access law. Its extraterritorial data jurisdiction provisions have challenged EU data sovereignty, digital governance, and industry structure, directly prompting the EU to accelerate its digital sovereignty initiatives.
Currently, the top three global cloud service providers are Amazon, Microsoft, and Google, collectively holding over 60% of the market share.
The latest report from the European Technology Outlook Institute reveals that in the EU-27 and the UK, 23 countries’ national security systems rely on U.S. technology, and 16 countries face high risks of being cut off from U.S. critical cloud services (including core countries like Germany and the UK).
Virkkunen, the EU’s technology affairs official, warned that the implementation of this law could lead to service paralysis or disruptions, and the EU must ensure it maintains control over services and data within its borders in critical areas.
For key public contracts, suppliers must ensure both software and hardware are manufactured within the EU to exclude non-European companies from data and service control.
The “Chip Act 2.0” is an upgraded version of the original EU chip法案 proposed in early 2023 and serves as a core legislative measure for advancing semiconductor technology sovereignty across the entire chain.
The EU displays a structurally fragmented landscape in the global semiconductor sector—excelling in some areas but lagging significantly in core segments like advanced manufacturing and chip design.
The revised “Chip Act” aims to incentivize manufacturers and buyers to reach agreements on future product procurements, thereby promoting European chip industry growth. The Commission targets a 20% global market share for the EU by 2030, double its current level.
The proposed EU measures include fast-track approval processes for data centers, granting priority grid access and lower network fees to data centers using European-made chips and enhanced energy efficiency.
On specific measures, the Act addresses domestic market “pain points” through substantive upgrades across five dimensions:
The public funding target rises from €200 billion to €300 billion, with an additional €50 billion allocated to a European Sovereign Fund specifically for semiconductors;
Subsidies extend from wafer manufacturing to chip design (EDA tools, IP cores), advanced packaging (3D packaging, Chiplet architecture), and local production of semiconductor-specific materials and equipment;
Building on focus on advanced processes (<5nm), it introduces dedicated support for mature processes above 28nm to ensure domestic supply in sectors like automotive, industrial control, and defense;
Additionally trains 100,000 semiconductor technicians by 2030 and streamlines the import process for non-EU semiconductor engineers;
Requires member states to complete strategic semiconductor project approvals within six months, adding a new EU-level coordination arbitration mechanism.
Simultaneously, with the Trump administration pushing unilateralism and “America First” agendas, impacting the existing international order, former allies are reassessing their reliance on the U.S. market.
In July 2025, Trump and von der Leyen announced a new trade agreement in the UK, but tensions rose after the U.S. demanded the Danish autonomous territory of Greenland, and the U.S. Supreme Court ruled against large-scale tariffs. This caused delays in EU approval of the agreement.
Trump once threatened a 10% tariff on imports from Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland starting February 1, with the rate to rise to 25% from June 1 until an agreement on the “full purchase of Greenland” was reached.
The European Parliament had frozen approval of the bilateral trade deal, but the EU’s trade and industry committee voted in favor of the deal on June 2.
