EU Cloud and AI Development Act | Updates, Compliance
What is the EU Cloud and AI Development Act?
The proposed EU Cloud and AI Development Act aims to strengthen Europe's leadership in cloud computing and artificial intelligence (AI), by establishing a robust regulatory framework for high-performance computing resources and digital infrastructure. It seeks to address the growing demands of AI applications while promoting innovation, interoperability, and a competitive internal market, ensuring Europe's technological sovereignty and long-term economic resilience.
The proposed Act complements existing EU regulations, such as the Artificial Intelligence Act (AI Act), which provides a legal framework for AI development and use within the EU.
09 April 2025 - 04 June 2025, European Commission, CALL FOR EVIDENCE FOR AN IMPACT ASSESSMENT, EU Cloud and AI Development Act
This document aims to inform the public and stakeholders on the Commission's future legislative work so they can provide feedback on the Commission's understanding of the problem and possible solutions and give any relevant information that they may have, including on possible impacts of the different options.
Current estimates and projections of European computing infrastructure point to a gap between available capacity and needs, in particular to accommodate the demands stemming from AI. The 2024 Draghi report recognizes the importance of increasing computational capacity in the EU as a critical component of a mature data economy which underpins many established and emerging digital use cases, particularly for AI development. Against this backdrop, the Cloud and AI Development Act is one of the headline digital policies outlined in the 2025 Competitiveness Compass and listed in the Mission letter to Executive Vice-President Henna Virkkunen alongside a single EU-wide cloud policy for public administrations and public procurement. This initiative is part of the actions foreseen in the AI Continent Action Plan.
Training, fine-tuning, and running AI models demand massive computational resources. While training requires large centralised computational capacity, the more decentralised cloud and edge computing are key enablers of smaller fine-tuning operations and of inference. Data centres play a key role in housing and running the necessary devices and equipment. The EU currently lags behind the US and China in terms of available data centre capacity. The initiative aims to tackle the currently unfavourable conditions for the private sector to close this capacity gap in a way that prioritises highly sustainable solutions.
To this end, the initiative seeks to address the problems that currently inhibit the expansion of the EU’s data centre capacity. These include difficulties in accessing natural resources (energy, water, land), as well as complicated and slow permitting processes, with approaches differing between Member States. The construction process is highly capital-intensive, creating barriers of entry for new players, and can be negatively affected by difficulties in obtaining technology components and capital. The energy and water consumption of data centres is rising and expanding capacity can further strain such resources, particularly in view of the current strong geographical concentration of data centres in the North-West of the EU. Technological innovation in data centre equipment and operations promises significant resource savings but remains underexploited. At the same time, high energy prices negatively affect the competitiveness of the sector in the EU.
Another problem that the initiative seeks to tackle is the lack of a competitive EU-based offer of cloud computing services at sufficient scale to serve highly critical use cases with particularly high security needs, as found in various economic sectors and the public sector.
The EU Cloud and AI Development Act in the Draghi report on EU competitiveness
On September 17, 2024, Mario Draghi, former President of the European Central Bank and Prime Minister of Italy, presented his report on the future of European competitiveness to the European Parliament in Strasbourg. The event was a significant moment, marking a comprehensive assessment of Europe's economic standing and offering strategic recommendations to enhance its global position.
The event was attended by Members of the European Parliament (MEPs), European Commission President Ursula von der Leyen, and other high-ranking EU officials. European Parliament President Roberta Metsola extended the invitation to Draghi and facilitated the session.
Draghi was commissioned by the European Commission to provide an independent analysis of Europe's competitiveness. His report aimed to diagnose current challenges and propose actionable strategies to ensure sustainable economic growth and resilience in the face of global shifts.
Draghi highlighted that Europe faces a rapidly changing global landscape, with slowing world trade, geopolitical fragmentation, and accelerated technological change. He emphasized that Europe's openness and dependencies make it particularly vulnerable to these shifts.
To address these challenges, Draghi proposed focusing on three main areas:
- closing the innovation gap with the United States and China,
- implementing a cohesive plan for decarbonization and competitiveness, and
- enhancing security while reducing dependencies.
He stressed the need for coordinated industrial policies, significant investments, and streamlined decision-making processes.
Draghi emphasized the necessity for the European Union to enhance its technological infrastructure and reduce dependencies on non-EU cloud service providers. He proposed the establishment of an EU Cloud and AI Development Act to create a unified framework aimed at bolstering Europe's capabilities in high-performance computing, artificial intelligence, and quantum technologies. This initiative seeks to harmonize cloud architecture requirements and procurement processes across member states, fostering a more competitive environment for European businesses.
Henna Virkkunen’s confirmation hearing, and the EU Cloud and AI Development Act.
A confirmation hearing is a formal procedure in which a nominated candidate for a high-level public position is questioned by a legislative body before being approved for the role. These hearings are commonly used to ensure that nominees are qualified, competent, and aligned with the policies and goals of the organization they will serve.
In the European Union, nominees for the Commission, including Executive Vice-Presidents and Commissioners, must be vetted by the European Parliament to assess their ability to perform their roles. Each nominee presents their vision and policy priorities during a public hearing. Members of the European Parliament (MEPs) ask questions about their policy focus, potential conflicts of interest, and strategy for implementing EU goals. A vote of confidence follows, determining whether the nominee can take office.
Henna Virkkunen’s confirmation hearing was an opportunity for MEPs to evaluate her qualifications, policies on AI, quantum technology, and cybersecurity, and her overall fitness for the role.
As of February 21, 2025, Henna Virkkunen serves as the Executive Vice-President for Tech Sovereignty, Security, and Democracy in the European Commission. She assumed this role on December 1, 2024, under the leadership of President Ursula von der Leyen.
In this capacity, Virkkunen is responsible for enhancing the European Union's technological independence, securing critical digital infrastructure, and promoting democratic values in the digital realm. Her portfolio includes overseeing digital and frontier technologies, implementing strategies to achieve Europe's 2030 Digital Decade targets, and developing initiatives such as the EU Cloud and AI Development Act.
According to Virkkunen, key technologies that will shape our future are AI, quantum, cloud, semiconductors and space technologies. She said: "To improve cloud services and to upscale our high‑performance computing capacity in an energy‑efficient way, I will propose the EU Cloud and AI Development Act. The Act will allow even the smallest businesses to access advanced AI services."
Cyber Risk GmbH, some of our clients
