EU's Cloud and AI Development Act Mandates Preference for European Tech Over US Providers

Summary

The EU has passed the Cloud and AI Development Act, mandating that public sector procurement in banking, healthcare, defense, and energy favor European-built software and hardware over American alternatives. This move was triggered by Microsoft France Director Anton Carniaux's June 2025 sworn testimony admitting he could not guarantee French citizen data stored on European servers would never be transmitted to US authorities under the US CLOUD Act. Combined with Trump-era executive orders expanding US surveillance, tariffs, and the declaration of AI as a US strategic asset, Europe has accelerated its push for digital sovereignty. Major developments include Cohere's acquisition of Aleph Alpha, SoftBank's $87 billion commitment to French nuclear-powered data centers, and the EU Parliament dropping Google for French search engine Qwant. The law represents what the article calls the largest regulatory market-share transfer in tech history, with American cloud providers (AWS, Microsoft, Google) controlling ~70% of the European market now facing legal preferences for EU alternatives.