EU unveils Tech Sovereignty Package targeting US cloud lock-in

The European Commission unveiled its Tech Sovereignty Package on 27 May 2026, bundling two pieces of draft legislation: the Cloud and AI Development Act (CADA) and a Chips Act 2.0. Brussels framed it as a response to the fact that around 70% of cloud services consumed in the EU still come from US hyperscalers, and that the US CLOUD Act gives Washington a legal route to compel disclosure of EU data held by those providers.

The headline mechanism is a four-tier “SEAL” sovereignty rating, intended for public-sector buyers and operators of essential services. The top tier requires that infrastructure, operations, and corporate control all sit inside the EU; lower tiers allow more US involvement. Sensitive workloads — financial, judicial, healthcare — would be expected to procure at the higher tiers, which structurally favours European providers.

Several incumbents in the EU catalog are explicit beneficiaries. Scaleway Compute Instances and OVHcloud Public Cloud Instances are the two largest French operators positioned to absorb migrations from AWS and Azure; Hetzner Cloud sits one step down the price curve for smaller workloads; STACKIT Compute Engine — Schwarz Digits’ German-only stack — already carries SEAL-3-class positioning for regulated German buyers. The package is also a tailwind for end-user privacy products like Proton Mail, whose pitch has always been jurisdictional rather than feature-led.

The Chips Act 2.0 half of the package raises the EU’s 2030 production target from 20% to 30% of global semiconductor output and lifts the available aid envelope to a reported €100bn, with named projects including TSMC’s Dresden fab and ASML’s High-NA EUV expansion in the Netherlands.

The draft texts now move into the European Parliament and Council, where the SEAL definition — and especially the boundary between tiers 2 and 3 — is expected to be the most contested element. The Health Data Hub migration from Azure to Scaleway, announced in April, has already given the policy a working precedent.

Sources: European Commission press materials (27 May 2026); CNBC; Kiteworks; Euronews.