EU drafts new tech package to reduce reliance on US and China

The EU is preparing a technology sovereignty plan to reduce dependence on US digital firms and Chinese chip suppliers by boosting Europe’s own cloud, AI, and semiconductor industries. The package aims to strengthen control over critical infrastructure and reduce reliance on foreign providers, while also introducing measures to speed up data centre and chip production and improve supply security. However, it has raised concerns from US officials and tech companies about possible trade tensions and reduced innovation.

The European Union is preparing a major policy shift aimed at reducing its dependence on foreign technology, particularly American digital companies and Chinese semiconductor supply chains. The move is part of a broader strategy by Brussels to strengthen Europe’s technological independence and reduce vulnerability to external political pressure.
Under a forthcoming technological sovereignty package, the EU plans to promote homegrown alternatives in areas such as cloud computing, artificial intelligence, and chip manufacturing. The initiative is intended to boost Europe’s industrial capacity while ensuring that critical digital infrastructure is not overly controlled by non-European firms. However, the plan is also expected to heighten tensions with the United States, whose companies currently dominate Europe’s digital ecosystem.
A draft strategy document reviewed by AFP states that the measures are designed to help Europe “reclaim its place in the global race for geoeconomic power.” Officials in Brussels are increasingly concerned about the extent of reliance on US-based cloud providers, which currently account for roughly 70 percent of the European market.
Since Donald Trump’s return to the White House, European policymakers have expressed fears that key digital services could be disrupted in the event of diplomatic or economic conflict. Some EU officials have warned about the theoretical risk of an American “kill switch” that could restrict access to essential digital infrastructure during geopolitical tensions.
Although EU leaders avoid directly naming the United States as a target, the dominance of American companies across cloud services, social media, and e-commerce is central to the debate. EU Competition Commissioner Teresa Ribera stressed the importance of reducing dependence on external powers, saying Europe must safeguard its decision-making autonomy, values, and economic stability.
European officials have also cited US sanctions against International Criminal Court judges, introduced under Trump in 2025, as an example of how foreign policy measures can have unintended consequences on individuals and systems reliant on American services. One judge reportedly lost access to financial services because of restrictions tied to US-based systems.
The United States, however, has cautioned against protectionist responses. US envoy to the EU Andrew Puzder warned that excluding American companies would be counterproductive, arguing that Europe should not attempt to build competitiveness by shutting out foreign firms.
The proposed package, expected to be unveiled on Wednesday, includes several major initiatives. These include a Cloud and AI Development Act aimed at accelerating data centre construction, a European Chips Act designed to strengthen semiconductor supply chains and reduce reliance on external providers, and recommendations encouraging public institutions to adopt more open-source software in order to increase flexibility and reduce dependence on specific vendors.
EU lawmaker Oliver Schenk clarified that the initiative is not intended as a confrontation with trading partners but rather a safeguard against excessive dependence on any single external actor. He emphasized the need for Europe to strengthen resilience in critical sectors such as AI, cloud computing, and chip production.
Draft proposals also suggest that governments should conduct “sovereignty risk assessments” for digital infrastructure projects to evaluate vulnerabilities and identify viable European alternatives. The goal is to ensure that public investment strengthens local innovation and long-term security.
In the semiconductor sector, the EU is considering emergency measures that would allow it to intervene during supply crises, including the ability to prioritize production of critical goods even if it overrides existing commercial contracts. The bloc is also exploring the idea of joint purchasing mechanisms, where member states would coordinate as a single buyer during shortages.
Industry groups and US stakeholders have pushed back against the narrative of potential digital “kill switches.” Aaron Cooper of the Business Software Alliance argued that such fears are overstated, stating that companies are required to comply with laws in all regions where they operate.
US technology firms have also sought to reassure European users that control over data remains with customers. IBM’s Ana Paula Assis emphasized that digital sovereignty is more about control and governance than physical borders, noting that companies support clients in managing their own IT infrastructure.
Supporters of the EU initiative argue that it will strengthen innovation and help Europe close the gap with the United States and China in the global AI and semiconductor race. However, critics, including Ben Brake of DOT Europe, warn that targeting US companies in response to trade tensions could undermine innovation rather than enhance competitiveness.