# EU Proposes €120B Tech Sovereignty Package > Source: [https://botensten.com/articles/eu-tech-sovereignty-package-2026](https://botensten.com/articles/eu-tech-sovereignty-package-2026) (canonical) > Author: iCharles News — Botensten, https://botensten.com > Published: 2026-06-15 ## TL;DR On June 3, 2026, the European Commission proposed the European Technological Sovereignty Package — four linked legislative initiatives covering semiconductors, cloud, AI, open source, and energy. The Chips Act 2.0 targets €120 billion in investment by 2035. The Cloud and AI Development Act aims to triple EU data center capacity within five to seven years. The package now moves to the European Parliament and Council, with final adoption likely 18 to 24 months away. ## What did the EU propose on June 3, 2026? The European Commission proposed the **European Technological Sovereignty Package** on June 3, 2026 — a four-part legislative push to cut the EU's dependence on non-EU technology providers. The package spans semiconductors, cloud infrastructure, AI, open source software, and energy. According to [Jones Day's analysis of the proposal](https://www.jonesday.com/en/insights/2026/06/eu-proposes-tech-sovereignty-package-with-major-implications-for-digital-markets), it marks a significant shift in how the EU approaches digital autonomy. ## What are the four parts of the package? The package has four distinct initiatives. Here is what each one covers: | Initiative | Key Target or Commitment | |---|---| | Chips Act 2.0 | €120 billion in investment by 2035; permitting capped at 12 months | | Cloud and AI Development Act (CADA) | Triple EU data center capacity within 5–7 years | | EU Open Source Strategy | €2 billion over 7 years; 30 million active users of open source tools by 2030 | | Strategic Roadmap for Digitalisation and AI in Energy | Pan-European AI model for power grid management | ## What is the Chips Act 2.0? **Chips Act 2.0** is the EU's proposed update to its semiconductor policy. It targets €120 billion — roughly $138 billion — in investment by 2035. The proposal would cap permitting at a maximum of 12 months and introduce "Grand Challenges" for AI chips. It also creates "Demand Accelerators" to connect EU chip producers with industrial buyers, as [Jones Day reports](https://www.jonesday.com/en/insights/2026/06/eu-proposes-tech-sovereignty-package-with-major-implications-for-digital-markets). ## What is the Cloud and AI Development Act? The **Cloud and AI Development Act (CADA)** is a proposed EU regulation that creates a single sovereignty framework for cloud services, with four assurance levels. It requires member states to conduct sovereignty risk assessments. Public authorities would face new obligations: sensitive data would need to be hosted on services controlled by EU entities. The [European Commission's CADA page](https://digital-strategy.ec.europa.eu/en/policies/cloud-and-ai-development-act) states the act also aims to make it faster to deploy sustainable cloud and data center infrastructure across Europe. The Commission points to two core problems CADA is meant to fix. Long permitting procedures, limited energy access, and financing gaps make it hard to scale digital infrastructure. Over-reliance on non-EU cloud providers also poses a risk to Europe's digital resilience. ## What does the EU Open Source Strategy commit to? The EU Open Source Strategy positions open source software as a structural tool for digital sovereignty. The Commission commits €2 billion — about $2.3 billion — over seven years. It introduces a "Free Software first" principle for public cloud and AI procurement. The strategy targets 30 million active users of open source collaboration tools by 2030. This could affect public procurement rules and the competitive position of proprietary software vendors. ## What is the energy roadmap about? The Strategic Roadmap for Digitalisation and AI in Energy addresses the power demands of digital infrastructure. It proposes tripartite agreements between data center operators, energy stakeholders, and public authorities. It also calls for a pan-European AI model for power grid management. Data center operators in the EU may face new compliance obligations under this initiative. ## Who does this affect? The package directly targets companies in semiconductors, software, cloud, and data centers operating in Europe. Public authorities face the most immediate obligations — particularly around where sensitive data is hosted. Procurement rules would shift to favor providers with EU-based design, manufacturing, or operational control. Here's what we know so far: the proposals are still legislative drafts, not final law. Significant amendments are possible as the package moves through the European Parliament and Council under the ordinary legislative procedure. The EU's push for [cloud AI sovereignty](https://digital-strategy.ec.europa.eu/en/policies/cloud-and-ai-development-act) connects to broader questions about how regulators are treating AI infrastructure globally. For context on how European courts are already acting on AI accountability, see the [German court Google AI ruling](/articles/german-court-google-ai-overviews-liable). On the US side, [Anthropic's IPO filing](/articles/anthropic-ipo-sec-openai-revenue-dispute) shows how AI companies are navigating their own regulatory and competitive pressures. Builders thinking about AI deployment in regulated markets should also watch how [Perplexity's hybrid local AI](/articles/perplexity-ceo-hybrid-local-revenue) model fits into emerging sovereignty frameworks — the CADA's assurance levels could shape which AI services public-sector clients are allowed to use. ## When will the package become law? The package now proceeds to the European Parliament and Council under the ordinary legislative procedure. Jones Day notes that a timeline of 18 to 24 months to final adoption would not be unusual for proposals of this scope. Significant amendments are possible during negotiations. ## Frequently asked questions ****What is the European Technological Sovereignty Package?**** The European Technological Sovereignty Package is a set of four legislative proposals put forward by the European Commission on June 3, 2026. It covers semiconductors, cloud and AI infrastructure, open source software, and energy for digital systems. Its stated goal is to reduce the EU's dependence on non-EU technology providers and strengthen Europe's digital autonomy. ****How much investment does the EU's Chips Act 2.0 target?**** Chips Act 2.0 targets €120 billion — approximately $138 billion — in semiconductor investment by 2035. It would cap permitting at 12 months, introduce "Grand Challenges" for AI chips, and create "Demand Accelerators" to connect EU chip producers with industrial buyers. The proposal is part of the broader European Technological Sovereignty Package announced on June 3, 2026. ****What does the Cloud and AI Development Act require from public authorities?**** Under the proposed Cloud and AI Development Act, public authorities would face obligations regarding sensitive data. That data would need to be hosted on services controlled by EU entities. The act also introduces four assurance levels for cloud services and requires member states to conduct sovereignty risk assessments. It aims to triple EU data center capacity within five to seven years. ****How much is the EU committing to open source software?**** The EU Open Source Strategy commits €2 billion — about $2.3 billion — over seven years. It introduces a "Free Software first" principle for public cloud and AI procurement and targets 30 million active users of open source collaboration tools by 2030. The strategy is designed to position open source software as a structural tool for the EU's digital sovereignty goals. ****How long will it take for the EU tech sovereignty package to become law?**** The package must pass through the European Parliament and Council under the ordinary legislative procedure. Jones Day notes that a timeline of 18 to 24 months to final adoption would not be unusual for proposals of this scope. Significant amendments are possible during negotiations before any of the four initiatives become binding law.