EU Commission Proposes New Rules for Tech Sovereignty in Chips, AI, and Cloud

The European Commission on Wednesday proposed a slew of new rules intended to bolster homegrown chips, AI and cloud services as the bloc scrambles to develop tech sovereignty amid huge reliance on products and services from the U.S. and China.

The proposals, which must be approved by all 27 member states, include new actions to bolster advanced chip manufacturing and homegrown cloud computing.

As geopolitical tensions across the globe have ramped up, there have been growing calls for Europe to diversify away from non-European providers of critical tech, including U.S. tech companies, which currently dominate the European market.

"We cannot afford to depend on others for the technologies that keep our hospitals running, our energy grids stable and our services secure," Commission President Ursula von der Leyen said in a statement.

As part of the proposals, a Cloud and AI Development Act (CADA) is being introduced with the aim to "mitigate the risks stemming from the EU's reliance on third countries for cloud computing services" by implementing an EU-wide framework setting out different levels of sovereignty needed for cloud computing for sensitive workloads at public organizations, according to the Commission press release.

The European Commission is looking to ensure that cloud providers of critical workloads don't have a "kill switch," Executive Vice-President Henna Virkkunen told reporters.

She added it would be difficult for U.S. companies to reach the highest levels of sovereignty because of the U.S. Cloud Act, which allows U.S. law enforcement to request user data from American companies, regardless of where the data is stored.

"We want to make sure that our most critical sensitive data is stored in Europe," she said.

CNBC previously reported that the European Union was considering rules that would restrict its member governments' use of U.S. cloud providers to handle sensitive data.