The European Commission has published a proposal for the Cloud and AI Development Act (CADA), a new regulation intended to strengthen the EU’s cloud computing and artificial intelligence ecosystem. The proposal forms part of the Commission’s broader strategy to enhance Europe’s technological sovereignty, increase computing capacity and reduce dependence on non-EU cloud providers.
The proposal builds on existing EU digital legislation, including the AI Act, the Data Act and the NIS2 Directive, while complementing recent initiatives such as the Chips Act 2.0, the Apply AI Strategy and the EU Open Source Strategy. Rather than regulating AI systems themselves, the proposed regulation focuses on the infrastructure needed to develop, deploy and operate AI across Europe.
To achieve these objectives, the proposal introduces a comprehensive framework centred around three key pillars:
- Research, development and innovation: The proposal establishes Cloud and AI Leadership Initiatives to support the development of next-generation cloud technologies, frontier AI, industrial AI, physical AI and energy-efficient data centre technologies.
- Data centre capacity: Recognising the growing demand for computing power, the proposal requires Member States to designate data centre acceleration zones with streamlined permitting procedures and coordinated planning for energy and network infrastructure.
- Digital sovereignty: The proposal introduces a harmonised EU-wide cloud sovereignty framework consisting of four assurance levels for cloud computing services.
The proposal would also establish a European Public Sector Cloud Federation (EuroCloud Federation) to facilitate the sharing of cloud services between public authorities, introduce common procurement mechanisms for cloud and AI services, and encourage the use of open-source software and open standards across public administrations.
While the proposal will now enter the ordinary legislative procedure and may change during negotiations, it is likely to have significant implications for both the public and private sectors.
More information about the proposal here.
