EU targets foreign control risks in cloud and chip supply

The European Commission wants to reduce the risk that foreign governments or companies could disrupt vital technology services in Europe, including through a potential “kill switch” affecting cloud computing. The proposals focus on cutting “risky dependencies” in cloud services, AI and semiconductor production, after China’s semiconductor export halt exposed vulnerabilities and amid concern that US authorities could access or demand sensitive data from American cloud providers.

Henna Virkkunen, the European Commission vice-president for tech sovereignty, said sensitive services and data linked to security and law enforcement should be controlled in Europe. EU member states would have to assess cloud providers used in sensitive areas such as defence, criminal justice and border management, and could be required to change providers if a service is deemed risky. The commission said the EU relies on foreign providers for more than 80% of digital products and services, infrastructure and intellectual property.

The plan also seeks to expand Europe’s AI infrastructure by fast-tracking datacentres and promoting semiconductor production. Despite the European Chips Act in 2023, the EU produces only 10% of the world’s semiconductors and remains heavily dependent on the US and east Asia for advanced chips. The commission aims to triple datacentre capacity within five to seven years, while introducing an energy-efficiency rating system and “acceleration zones” for faster permitting.