The Cloud and AI Development Act is the EU's new proposal for Cloud, AI, and digital sovereignty

The proposal comes at a time of growing demand for computing capacity, driven by the rapid development of AI. It reflects the need to ensure that Europe has the infrastructure required to develop and deploy these technologies. Proposed measures include expanding the capacity of European data centres, establishing a common framework for assessing the sovereignty of cloud and AI services, and facilitating the public sector's adoption of these technologies. 

The CADA forms part of the European Technological Sovereignty Package, which was also presented by the European Commission on 3 June 2026. This package also includes the Chips Act 2.0 and the European Open Source Strategy, as well as a roadmap for digitalisation and AI in the energy sector. 

Expanding Europe’s computing capacity 

The European Commission considers this essential in order to keep pace with the development of artificial intelligence and ensure that businesses, researchers and public authorities have access to adequate resources. The Commission has set a target of tripling the EU’s data centre capacity within the next five to seven years. 

In this context, the expansion of cloud infrastructure is intended to complement the development of AI Factories and AI Gigafactories, providing computing resources on various scales for a broad range of applications. 

The proposal also includes measures to facilitate the development of data centres across the European Union, including mechanisms to accelerate certain projects and create more favourable conditions for the deployment of strategic infrastructure. 

Energy efficiency is another important consideration in this expansion. The growing computing requirements of AI are increasing energy demand, so it is becoming increasingly important to develop solutions that improve the energy and water efficiency of data centres, encourage the reuse of waste heat, and strengthen the integration of these facilities into the wider energy system. 

A European framework for assessing the sovereignty of cloud and AI services 

One of the key elements of the CADA is the establishment of a framework to assess the sovereignty of cloud and AI services across Europe. 

The proposal aims to establish common criteria for evaluating the various aspects of service sovereignty, such as data location and protection, operational control, technological dependencies, and exposure to third-country jurisdictions. 

The aim is to provide a common reference framework for evaluating and comparing various cloud and AI solutions, particularly within the scope of public administration and critical sectors. 

Under the proposed approach, the sovereignty of digital services is not determined solely by where data is stored. It also encompasses control over infrastructure and services, technological dependencies, and the legal conditions under which services operate. 

Cloud and AI in the public sector 

The CADA includes measures to encourage the public sector to adopt cloud and AI technologies. 

The Commission aims to promote a more coordinated approach to the use of these technologies across Member States, taking into account factors such as security, sovereignty, interoperability, and technological dependencies. The proposal also includes a common public procurement framework designed to strengthen coordination between public administrations and leverage their purchasing power when procuring cloud and AI services. 

The proposal recognises open source as a means of strengthening resilience, reducing technological dependencies, and promoting interoperability and the reuse of solutions and components. 

This approach aligns with the European Open Source Strategy, which is part of the European Technological Sovereignty Package. 

Portugal is strengthening its national cloud and data centre capacity. 

This comes at a time when Portugal is implementing measures to develop its digital infrastructure, strengthen technological sovereignty, and improve resilience. 

The Cloud National Plan For Sorvereign Cloud (PNNS) was approved by the Council of Ministers in Resolution No. 102/2026 on 27 May. The PNNS sets out a national approach to strengthening the state's digital sovereignty and resilience, including measures relating to the control and protection of data, systems, and public administration infrastructure. 

The PNNS also establishes a model for classifying public administration processes according to their criticality level and the corresponding technical requirements. Implementation involves several entities, including the Agency for Technological Reform of the State (ARTE), the National Cybersecurity Centre (CNCS), the Public Administration Shared Services Entity (ESPAP) and IP Telecom. These entities have different responsibilities, such as process classification, defining sovereignty and security requirements, procurement, and developing national sovereign cloud services. 

Portugal also has a National Data Centre Plan (PNCD), which was approved by the Council of Ministers in Resolution No. 70/2026 on 13 April. 

The PNCD recognises computing capacity as a strategic asset for economic competitiveness, the digital transformation of the public administration sector, and digital sovereignty. The plan sets out measures to support the development of data centres in Portugal and improve the conditions for deploying this infrastructure. 

These measures include creating pre-equipped zones for data centres, streamlining licensing procedures, strengthening institutional coordination, and providing a single point of contact for investors through AICEP. 

Alignment between European and national priorities 

The priorities set out in the CADA are similar to the measures included in Portugal’s national plans, particularly with regard to computing capacity, digital infrastructure, and technological sovereignty. 

However, this does not mean that national initiatives stem from the European proposal. The National Sovereign Cloud Plan and the National Data Centre Plan were developed and approved as part of Portugal’s national policies. 

Nevertheless, the development of the CADA may be relevant for Portugal, particularly with regard to the use of cloud and AI services by the public administration, the assessment of service sovereignty, and the development of computing capacity. 

As the European legislative framework takes shape, closer alignment between national and European policies could lead to greater consistency in these areas. 

A European Commission proposal 

The Cloud and AI Development Act will be considered under the ordinary legislative procedure, which involves the European Parliament and the Council. The legislative procedure (2026/0138(COD)) is currently underway, and the proposal may be amended during negotiations between EU institutions. 

Nevertheless, the proposal represents a significant development in the European approach to computing capacity, cloud services and artificial intelligence. The proposed framework encompasses infrastructure development, technological innovation, energy efficiency, the adoption of digital solutions by the public sector, and the evaluation of service sovereignty. 

For Portugal, monitoring this process will be particularly important in the context of implementing the National Sovereign Cloud Plan and the National Data Centre Plan. The evolution of the European framework could help to establish common reference points in an area that is strategically important for the digital transformation of public administration, economic competitiveness, and the development of artificial intelligence.