EU tech sovereignty plans face pushback from European companies

In short: European companies are warning that the EU’s plan to rely less on foreign tech could add more rules and costs.

What's going on

The European Commission is putting “tech sovereignty” at the center of its 2026 Work Programme. The basic idea is to help Europe depend less on foreign technology providers, especially big US cloud companies.

Several new laws are planned for 2026. One is a Cloud and AI Development Act, which aims to boost Europe’s cloud and AI infrastructure and make services work better together (like making sure different brands of chargers can plug into the same device). The push comes as three US firms are estimated to control about 65% of the European cloud market.

Industry groups and companies say the goal is understandable, but they worry about overload. Many businesses are still adjusting to earlier rules like the AI Act and GDPR, Europe’s data privacy law. Critics say adding more initiatives, including a Quantum Act, a European Innovation Act, a Digital Networks Act, and a “28th Regime” for cross border company law, could make it harder for companies to grow.

What to watch

A key question is whether the EU can pair new investment plans, such as InvestAI and a proposed Chips Act 2.0, with simpler compliance. Companies are calling for a “Digital Simplification Omnibus,” meaning a clean up of overlapping rules and timelines, especially for smaller firms. If the EU does not reduce paperwork and uncertainty, stakeholders warn that startups and skilled workers may keep moving to the US, which could weaken Europe’s ability to compete globally.

Source: Financial Times