The European Commission wants the market share of European providers of cloud services and computing for artificial intelligence to reach 30% of the European market by 2035, compared with around 15% today, according to the impact assessment accompanying the Cloud and AI Development Act (CADA) (see EUROPE 13880/2). This text forms part of its legislative package on technological sovereignty, aimed at reducing the Union’s external dependencies in strategic sectors such as cloud, artificial intelligence and semiconductors (see EUROPE 13880/1).
“By 2035, this intervention should raise the market share of European providers of cloud services and computing for AI to 30% on the European market”, the document states.
However, the Commission’s most “optimistic” scenario projects a market share of only 17%. Its baseline scenario assumes that European providers will simply maintain their current 15% share, while the pessimistic scenario foresees a decline to 10%, reflecting “a resumption of the downward trend observed until 2022”.
Sovereign services for essential public uses. To help protect public order by strengthening the resilience of the supply of cloud services and computing for AI, particularly in the public sector, the Commission wants, by 2035, 100% of highly critical public-sector use cases to rely on sovereign cloud services and computing for AI in order to guarantee data confidentiality, operational autonomy and prevent risks liable to compromise public order.
“These use cases must as a priority be transferred to services whose provision is free from the influence of third-country policies liable to lead to data access or service interruptions, in other words sovereign services”, the document stresses.
Based on discussions with three different public authorities, the Commission estimates that 70% of use cases would require level 1 sovereignty, 20% level 2, 9% level 3 and 1% level 4.
According to the document, for level 1, “US hyperscalers generally have offers enabling them to meet the corresponding requirements”. For level 2, “non-European companies, outside joint ventures, could also be eligible, provided they demonstrate the absence of interference by a third country”. By contrast, for the highest sovereignty levels, the requirements become far more stringent, with a higher level of cybersecurity assurance and control over their software supply chain.
According to the Commission’s assessment, these requirements “would not allow providers whose parent company is established outside the Union to be regarded as level 3 or level 4 sovereignty providers”.
When presenting the package on technological sovereignty on 3 June, the Executive Vice-President of the European Commission for Technological Sovereignty, Security and Democracy, Henna Virkkunen, noted that these sovereignty levels 3 and 4 impose “stricter” requirements, notably as regards infrastructure location, control of software and the supply chain, as well as cybersecurity requirements.
“When we are talking about level 4, only European companies can qualify for it. As for level 3, it is currently very difficult for US companies to reach that level because of the US Cloud Act”, she said.
Significant costs, but greater economic benefits. The working document presents several estimates of the costs associated with the various policy options. The costs linked to porting systems could amount to between €620 million and €4 billion over three years from 2030. To this would be added the costs of setting up a federated cloud platform for the public sector, estimated at between €170 million and €260 million in present value terms, bringing the total cost to between €820 million and €4.4 billion.
For a small public authority, such as a medium-sized municipality, the cost of the transfer could amount to between €4.7 million and €6 million over five years, or around €1 million per year, with around 30% of systems having to be transferred to a sovereign cloud environment, while for a medium-sized public authority, such as a national agency, this cost would amount to between €7.3 million and €8.6 million, or around €1.6 million per year, and for large public administrations, such as a ministry, between €16.6 million and €18.6 million, or around €3.5 million per year.
Although the migration of existing cloud systems is “more difficult to estimate” because of the diversity of situations, the impact assessment nevertheless underlines that these costs must be viewed in perspective against the expected benefits.
In terms of savings, the Commission estimates that public authorities could make savings of between €21 billion and €61 billion over 10 years, a significant share stemming from joint public procurement at European level, which would begin by handling 2% of the total volume of national purchases of cloud and AI services before reaching 20% at the end of the 10-year period. (Original version in French by Ana Pisonero Hernández)