Europe Is Done Renting Its Cloud From America

On June 3, 2026, the European Commission did something it has spent two decades talking about and almost never doing: it tried to take its own digital infrastructure back.

The vehicle was a bundle of legislation the Commission branded the Tech Sovereignty Package — at its center, two proposals. The first, the Cloud and AI Development Act (CADA), is designed to rebuild Europe's domestic cloud and data-center capacity. The second, Chips Act 2.0, is a €120 billion ($140 billion) bet to make sure Europe doesn't just manufacture semiconductors but actually consumes its own.

For investors, the headline isn't the regulation. It's the capital. Brussels is attempting to redirect a multi-hundred-billion-euro spending base away from American hyperscalers and toward European providers — using the one weapon it has never seriously deployed before: public procurement as an industrial policy lever.

This is not another GDPR-style compliance story. It is a demand-side intervention in a market the United States currently owns.

The Dependency Problem

Start with the number that frightened Brussels into action. The European-headquartered share of the European cloud market has collapsed from roughly 29% in 2017 to about 15% by 2022, according to the Commission's own figures. The rest belongs overwhelmingly to three American companies.

Globally, Amazon Web Services holds around 30% of cloud infrastructure, Microsoft Azure around 25%, and Google Cloud around 13% — together roughly 68% of all enterprise cloud spending. In Europe, the concentration is even sharper. The continent runs its banks, its hospitals, its tax authorities, and increasingly its defense data on infrastructure controlled, owned, and ultimately governed by US law.

That last point is the strategic one. Under the US CLOUD Act, American providers can be compelled to hand over data regardless of where the servers physically sit. For a Europe that has spent the past three years absorbing the lesson that strategic dependencies — on Russian gas, on Chinese rare earths, on Taiwanese chips — get weaponized the moment relations sour, a 70% reliance on American digital infrastructure stopped looking like a convenience and started looking like a liability.

What the Package Actually Does

CADA is more aggressive than its predecessors because it doesn't simply throw subsidies at the supply side and hope. It does three concrete things:

It triples capacity. The Act sets a target to roughly triple EU data-center capacity over the next five to seven years, with member states required to designate "data-center acceleration zones" — areas with streamlined permitting and a hard 12-month approval ceiling. Anyone who has watched a European data-center project die in a permitting queue understands why this matters.

It defines sovereignty in law. The Act creates a Cloud Sovereignty Framework with tiered assurance levels. At the higher levels, a provider must be owned and controlled from within the EU, demonstrate independence from third-country interference, and in some cases meet personnel-citizenship requirements. For the first time, "sovereign cloud" is a legal status, not a marketing slogan.

It rewires procurement. This is the part that moves money. A "Union added value" criterion requires public-sector buyers to weigh how much a provider strengthens the EU's own technology supply chain when awarding contracts. Translated: when a European government agency buys cloud, it will be structurally nudged — and in sensitive sectors, effectively required — to buy European.

Chips Act 2.0 applies the same logic one layer down. The original 2023 Chips Act focused on luring fabs to European soil. The sequel admits that was the wrong target and shifts toward guaranteeing domestic demand for European-made chips and reducing strategic dependencies — €120 billion in coordinated investment aimed at 2035.

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