How the EU plans to cut its dependence on US tech

The European Union is preparing a new push to reduce its reliance on American technology providers, from cloud and data centers to artificial intelligence, microchips and software. Brussels argues that heavy dependence on a few foreign suppliers has become a strategic risk as global trade and geopolitics grow more volatile.

A forthcoming European Commission package on “technological sovereignty,” expected to be presented on June 3, outlines several policy tracks to strengthen local capabilities while keeping markets open. Rather than outright banning foreign vendors, the strategy seeks to give EU governments tools to spot vulnerabilities and to nurture homegrown alternatives.

Why technological dependence has become a strategic issue

In a draft of the strategy, the Commission warns that growing geopolitical tensions and the use of supply chains as political leverage have turned technological dependence into a security concern. Heavy reliance on non-EU firms for critical digital infrastructure is framed as a strategic liability, especially when those firms are subject to foreign laws and political pressure.

The package, which will be flanked by a separate law on cloud services, targets several areas where U.S. firms dominate EU markets: cloud infrastructure, data centers, AI tools, proprietary software and advanced semiconductors. The draft underlines that Europe wants to stay connected to global markets but with stronger safeguards for its own interests and values.

1. Stress tests for government cloud dependence

One key proposal would require EU countries to examine how dependent their public administrations are on foreign cloud providers. National authorities would need to evaluate government digital services against EU sovereignty criteria to see where critical systems depend on external platforms.

Behind this is a recurring fear in Brussels of a “kill switch” scenario, in which a foreign supplier could be forced to cut off key services or access to data. By mapping out where such chokepoints exist, governments could then decide whether to switch to more resilient or European-based alternatives, particularly for sensitive public-sector contracts.

The Commission would not, however, prescribe specific solutions. According to people familiar with the plan, EU capitals would have broad discretion over whether and how to act on the findings. That means some governments could choose substantial changes, while others may leave current arrangements largely untouched.

In the strategy draft, the Commission argues that bolstering Europe’s own technological base in digital supply chains—especially where other global powers are heavily present—creates a counterweight that allows the EU to remain open without undermining its security or autonomy.

2. A revamped chips law to scale up semiconductor capacity

Another central element is a revision of the EU Chips Act, the semiconductor framework adopted in 2023. A draft of the updated law, seen alongside the strategy, shifts the focus from setting up the framework to expanding actual industrial capacity and preparing for future crises.

The revised scheme would prioritize large semiconductor projects deemed of European interest. These could receive easier access to public funding, accelerated permitting procedures and priority use of pilot production lines. The aim is to make it more attractive to build and expand advanced chip facilities in Europe.

The Commission’s text recalls how recent semiconductor shortages disrupted production across sectors such as automotive, healthcare equipment, energy infrastructure and consumer electronics. Those bottlenecks highlighted how vulnerable Europe is to shocks in chip supply chains dominated by Asian manufacturing and U.S. design and tooling.

At the same time, Brussels acknowledges that new fabs are unlikely to be built at scale without clear demand. The updated Chips Act therefore seeks not only to boost supply and resilience but also to support market uptake, so that investments in new capacity can be economically viable.

3. Leveraging open-source to avoid vendor lock-in

The strategy also elevates open-source software as a tool to reduce dependency on proprietary platforms controlled by a small number of global vendors. By relying more on software whose code is publicly available, public bodies and companies can audit what they use, adapt it and switch providers without being tied to a single company.

The Commission plans measures to highlight successful European open-source firms, encourage cross-border collaboration on open technologies and address a key weakness of the open-source ecosystem: the long-term maintenance and security of widely used components. A new “maintenance instrument” is envisaged to help sustain and support critical open-source projects that underpin public services and industry.

According to the draft, this ecosystem can lower technology costs, accelerate innovation and enable European companies, researchers and administrations to develop secure and customizable digital solutions. The Commission also points out that the EU currently spends around €264 billion a year primarily on proprietary solutions from U.S.-based suppliers, indicating a substantial market where European and open alternatives could gain ground.

4. Financing digital infrastructure and AI deployment

Delivering on Europe’s digital sovereignty ambitions will require significant investment. The Commission estimates that ramping up EU data center capacity by 2036 will alone demand about €200 billion. An additional €2 billion is flagged for research and innovation related to data centers, while around €20 billion in combined public and private funding would be needed to support plans for digitalization and AI deployment in the energy sector.

Given the scale of these sums, Brussels expects most of the money to come from private investors rather than EU or national budgets alone. The legislative package therefore aims to make Europe’s digital infrastructure projects more attractive targets for capital, both from within the EU and from third countries.

To that end, the Commission intends to create an EU-level promotion initiative that offers streamlined, transparent information on investment needs and project readiness. The draft mentions concepts such as “semiconductor regions of excellence” and “data center acceleration zones” that would be defined in the legislation, designed to signal where projects are clustered and where authorities are ready to facilitate deployment.

Limited central powers, big expectations for member states

Although the strategy uses strong language on the risks of technological dependence, many of the concrete actions are left in the hands of member states and private actors. National governments would be tasked with assessing their reliance on foreign cloud and digital services, deciding whether to adjust procurement policies, and coordinating around open-source initiatives.

The Commission, for its part, is positioning itself as an enabler: setting common criteria, updating sectoral laws such as the Chips Act and trying to steer investment flows. This approach reflects both the limits of EU competence in industrial policy and the political sensitivity of directly restricting specific foreign providers.

As the legislative texts move toward publication, industry and governments will be watching how far the final versions go in challenging U.S. tech dominance—and whether the promised funds and political will materialize to build a more self-reliant European digital infrastructure.