Europe now wants to build the technology it regulates

When the European Union adopted the GDPR in 2018, it established itself as the global benchmark for digital regulation. The Digital Markets Act, the Digital Services Act and, later, the AI Act confirmed this position. Faced with US technology giants and China’s rapid ascent, Brussels chose to set the rules of the game rather than attempt to build champions of its own.

The technological sovereignty package presented this week marks a change of direction. Through the Chips Act 2.0, the Cloud and AI Development Act, its open-source strategy and its roadmap for energy and artificial intelligence, the European Commission is no longer seeking solely to regulate technology. It now intends to participate in building it.

For two decades, the European Union considered its strength to lie in its single market, its standard-setting capacity and its regulatory power. It now believes these levers are no longer sufficient in an international environment where technology has become an instrument of economic, industrial and geopolitical power.

Ursula von der Leyen summarised this shift: “We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure.”

The issue is no longer simply digital competitiveness. It has become a question of controlling the infrastructure essential to the functioning of the economy.

This shift can first be explained by a series of successive shocks. The pandemic exposed the vulnerability of global supply chains. Semiconductor shortages brought parts of European industry to a standstill. The energy crisis triggered by Russia’s invasion of Ukraine revealed the risks associated with excessive dependence on strategic resources controlled by external powers. Finally, the rise of artificial intelligence demonstrated that the most advanced technologies now depend on vast physical infrastructure.

Artificial intelligence is no longer simply a matter of algorithms. It relies on advanced semiconductors, data centres, electricity grids, cloud infrastructure and growing volumes of data.

AI has become a capital-intensive industry, and this reality underpins the entire package presented by the Commission.

The first signal is the emphasis placed on semiconductors. With the Chips Act 2.0, Brussels is seeking to consolidate an industry that is already strategically important to Europe, particularly around companies such as ASML, STMicroelectronics and Infineon. The objective is not only to secure supplies, but also to ensure that Europe retains a role in the global value chain for the components powering data centres, networks and artificial intelligence systems.

The second pillar concerns cloud infrastructure and computing capacity. For years, Europe allowed US hyperscalers to dominate the market. Amazon Web Services, Microsoft Azure and Google Cloud now account for most of the infrastructure used by European businesses. The new Cloud and AI Development Act reflects a determination to reduce this dependence by supporting the emergence of infrastructure capable of underpinning the development of European models.

This ambition is directly linked to the surge in demand for computing power driven by generative AI. Europe no longer wants to remain merely a consumer market for models developed elsewhere. It is seeking to establish its own computing capacity, an essential condition for the emergence of a competitive ecosystem.

The inclusion of a dedicated open-source strategy in the package is equally significant. Brussels now regards open-source software as a strategic asset. As digital infrastructure becomes increasingly concentrated in the hands of a small number of global companies, open source offers a way to preserve independent innovation capabilities and limit certain technological dependencies.

The most revealing change, however, concerns energy. Until now, energy and digital policies have largely been treated as separate fields. The Commission is now establishing a direct link between them. Data centres are being recognised as critical infrastructure. Electricity is becoming a strategic resource for artificial intelligence, while power grids are emerging as assets of digital sovereignty.

Artificial intelligence cannot develop without access to abundant, competitive and decarbonised energy. Commission projections suggest that Europe’s installed data-centre capacity could more than double by the end of the decade. This expansion comes as the electrification of transport, industry and heating is already increasing pressure on power grids.

Digital sovereignty now depends on the ability to generate, transport and distribute the electricity required by the AI economy, and the European Union is attempting to develop its own response.

The distinctiveness of the European approach lies in its attempt to balance economic openness with a reduction in strategic dependencies. The Commission is not seeking to close the European market, but to ensure that certain critical capabilities can be developed and operated within the European Union.

This ambition marks a break with the previous phase of European digital policy. Where earlier legislation focused primarily on the conditions under which technologies could be used, the package presented this week addresses the conditions under which they are produced.

The question is therefore no longer doctrinal, but industrial. Behind the legislation lie substantial investments in factories, data centres, electricity grids, cloud infrastructure and computing capacity. What resources will Europe mobilise to deploy a sufficiently ambitious industrial policy and reposition itself at the heart of the AI revolution?