EU Seeks Tech Sovereignty, Eyes Cut in US, China Dependencies

The EU executive wants to ensure no foreign government or company has access to a “kill switch” to turn off or disrupt vital tech services across the continent, as part of an effort to cut dependencies on the US and China.

Publishing “technological sovereignty” proposals that risk further tensions with Donald Trump, the European Commission said on Wednesday the bloc needed to reduce dependency on foreign suppliers in cloud computing, artificial intelligence and semiconductor production.

The EU’s vulnerabilities were exposed last year when China stopped semiconductor exports, almost bringing the European car industry to a halt. Meanwhile, there is concern that Trump or a future US president could use a “kill switch” to terminate US cloud computing services overnight, or require providers to hand over sensitive data.

Henna Virkkunen, the European Commission vice-president for tech sovereignty, said the 2018 US Cloud Act – enabling federal authorities to access data stored by US providers in other countries for national security reasons – “was not in line with our rules here”.

Virkkunen said the EU was “not planning to work in isolation and produce everything ourselves” but had to identify “risky dependencies” by ensuring sensitive services and data, relating to security and law enforcement, were controlled in Europe.

The EU needed to be sure no one had the “kill switch possibility”, she said, adding it would be “very difficult” for US companies to pass strict EU criteria to provide cloud computing services in areas such as defence.

The EU was reliant on foreign providers for more than 80% of digital products and services, infrastructure and intellectual property, the commission said, creating “excessive technological dependencies”.

The proposals, which have to be agreed by member states and the European parliament, could open a new front in ongoing tensions with the Trump administration, which has criticised EU digital regulation and routinely threatened allies with tariffs.

Under the proposals, EU member states would be required to conduct a risk assessment into providers of their cloud computing services in sensitive areas such as defence, criminal justice and border management. If the service was deemed risky, authorities could be required to switch providers.

The draft law suggests US cloud providers operating in the EU might have to comply with EU data protection rules and prove they would not be compelled to surrender EU data to US authorities.

US companies could argue that entities they have already set up in Europe meet the EU’s sovereignty requirements.

Lara Natale, the senior director for public affairs at the Centre for Future Generations, a Brussels-based thinktank, said: “They will invest a lot of money in the upcoming months to try to lobby, try to create common positions, try to position themselves on the side of the new sovereignty discussion.”

The Computer and Communications Industry Association, whose members include Amazon and Google, said the commission had produced “a dangerous recipe for progressive market shutdown” that would push trusted providers out of parts of the EU market.

The commission also wants to boost Europe’s AI infrastructure by fast-tracking the building of datacentres and promoting European semiconductor production, in an effort to keep up with the US and China in the race to develop the technology.

However, Olivier Darmouni, an associate professor at HEC Paris, cast doubts on proposals to build an “advanced manufacturing facility” in the EU for the most cutting-edge semiconductors and AI chips. For the EU to build such chips was not realistic “at the timescale that they need to catch up to the US and even try to match them in terms of AI leadership”, he said. However, building other chips – RAM chips and memory chips, of which there is now a huge global shortage – could still be beneficial.

Despite passing the European Chips Act in 2023, the EU produces only 10% of the world’s semiconductors and is almost entirely dependent on the US and east Asia for the most advanced chips, including AI chips. Building the plants capable of fabricating state-of-the-art AI chips is a multi-year, multi-billion-dollar effort.

As part of the plan to triple the EU’s datacentre capacity within five to seven years, the commission will roll out a rating system to ensure energy efficiency of the power-hungry facilities. It will also create “acceleration zones” to offer fast-tracked permitting for datacentres.

Darmouni said the proposals appeared to dodge the question of how the EU could reconcile its datacentre buildout with its climate goals: “Very soon it will be in Europe as it is in the US, where people are worried that datacentres are going to blow up their electricity bill – and the climate trajectory is going to suffer from that.”