According to a recent briefing from the European Parliamentary Research Service, the European Commission is preparing a major new legislative initiative: the Cloud and AI Development Act (CADA). This upcoming act is expected to become a central pillar of the EU’s broader strategy to strengthen its technological sovereignty and close the growing gap with other global powers in cloud infrastructure and artificial intelligence development .
The document explains that Europe currently faces a structural disadvantage. Despite having an economy comparable in size to that of the United States, the EU holds only half the US share of global data-centre capacity. Even more strikingly, three US hyperscalers control around 65% of the EU cloud services market, a level of dependency that raises concerns about competitiveness, resilience, and long-term strategic autonomy. In response, the Commission intends to create a coherent framework capable of stimulating investment, improving regulatory clarity, and fostering secure, EU-based cloud and AI capabilities.
As described in the briefing, the CADA is being designed around three main pillars:
1. Advancing research and innovation.
The Commission wants to support cutting-edge work on AI-enabling technologies, with a particular focus on resource-efficient data processing and new architectures for decentralised computation. This would complement EU initiatives like Chips for Europe and respond to the rapidly growing energy demands of large AI models.
2. Creating the right conditions for investment in data centres.
Europe aims to triple its data-centre capacity within five to seven years. To achieve this, the act could streamline permitting procedures, address obstacles in access to land and energy, and mobilise both public and private capital—including through instruments like the proposed European Competitiveness Fund.
3. Ensuring highly secure EU-based cloud and AI computing capacity.
A key goal is to define what counts as “highly secure” cloud infrastructure for critical use cases, such as defence, public administration, and critical infrastructure. Efforts to create such a standard previously stalled in discussions on the EU Cybersecurity Certification Scheme for cloud services. The CADA is expected to revive this conversation and provide the regulatory clarity needed to develop trustworthy, sovereign cloud options.
The briefing makes clear that this initiative is meant to complement, rather than replace, existing legislation, including the Data Act, most of which entered into force in September 2025. If successful, the CADA could mark a significant step toward a more resilient digital ecosystem in Europe, capable of supporting both innovation in artificial intelligence and the broader objectives of the EU Digital Decade.