Brussels Tables Tech Sovereignty Package Next Week: Cloud, AI, Chips Act 2

The European Commission will table its Tech Sovereignty package on Wednesday 27 May 2026, a week from today, with two flagship legislative instruments: the Cloud and AI Development Act and the Chips Act 2. The package, prepared by the Cabinet of Executive Vice-President for Tech Sovereignty, Security and Democracy Henna Virkkunen, has been signalled by President Ursula von der Leyen as the central regulatory response to renewed concerns about Europe’s dependence on non-European cloud infrastructure and frontier semiconductors at a moment when both have become acutely strategic.

The case for tech sovereignty in 2026

The political ground for the package has been prepared by a series of high-profile incidents and policy developments. The geopolitical tension around Mythos and other advanced artificial-intelligence systems has reopened the debate about Europe’s exposure to non-European foundation models and the cloud capacity required to train and run them. The Iran war and the related supply-chain disruptions have reinforced the broader sense that European resilience depends on industrial capacity within the Union, not on assured access to overseas suppliers. And the persistent gap between Europe’s share of global semiconductor demand and its share of production — the original justification for the 2023 Chips Act — has not closed despite the substantial public investment already committed.

What the Cloud and AI Development Act is expected to contain

The Cloud and AI Development Act is structured around three policy objectives. First, the expansion of European cloud capacity through targeted investment incentives, certification frameworks and procurement-side measures. Second, support for the development of AI capacity within Europe — covering compute infrastructure, model development, data spaces and the regulatory environment for AI in critical sectors. Third, a coordinated approach to AI cybersecurity, integrating the implementation of the NIS2 directive with new requirements specific to frontier AI systems.

The Act is also expected to introduce a “Europe-first” framework for public procurement of cloud services, building on the EUCS certification scheme. The level of preference for European providers — and the precise definition of what counts as a European provider — has been the most contested issue in the Commission’s internal deliberations, with industry split between those calling for strict criteria and those warning that an overly restrictive approach will lock the European market into incumbents that cannot match the scale of US hyperscalers.

The Chips Act 2

The Chips Act 2 is intended as the successor to the 2023 Chips Act, whose target of doubling Europe’s share of global semiconductor production to 20 percent by 2030 has been widely judged as unlikely to be met on current trajectories. The new instrument will focus on three areas: equipment and materials, where Europe retains a competitive position through ASML and a number of specialised players; advanced-node manufacturing capacity, where the gap with Asia and the United States is starkest; and the broader semiconductor talent and research pipeline, including the role of the IPCEIs (Important Projects of Common European Interest) and the European Chips Joint Undertaking.

The Commission has signalled that the Chips Act 2 will not seek to revise the 20 percent production-share target — politically too sensitive to weaken — but will focus on the measures required to make the target more attainable. Industry expects, in particular, increased state-aid flexibility for advanced packaging facilities and new partnerships with non-EU producers, including potentially with Japan, South Korea and Taiwan.

The institutional path forward

Following the Commission’s adoption on 27 May, the proposals will enter the ordinary legislative procedure. The European Parliament’s Committee on Industry, Research and Energy (ITRE) is expected to lead on both files, with rapporteurs to be appointed in the weeks that follow. Member States will examine the proposals through the Council’s Competitiveness configuration. The political environment — with Parliament’s vocal support for stronger European tech autonomy through the Renew, EPP and S&D groups, and with Member States divided on the appropriate balance between sovereignty and openness — suggests a difficult but not impossible negotiation through the autumn and into 2027.

Sources: Renew Europe Plenary Priorities 18-21 May 2026; European Commission programme; College of Commissioners agenda 27 May 2026; cabinet of Executive Vice-President Virkkunen.