How do cities and regions support CADA automotive testing?

As proposed, the Cloud and AI Development Act (CADA) establishes a specific framework for cities and regions to serve as critical real-world validation env

Summary As proposed, the Cloud and AI Development Act (CADA) establishes a specific framework for cities and regions to serve as critical real-world validation environments for automotive AI. Recital 19 explicitly mandates Member States to facilitate the testing and deployment of AI systems for autonomous driving through cooperation with Experience and Acceleration Centres for AI (Centres for AI), the automotive industry, and local authorities. This creates a tripartite model where cities provide diverse physical environments, Centres for AI provide technical and computational support, and Member States ensure strategic alignment. While CADA does not regulate physical traffic laws, it would mandate the digital infrastructure and procurement strategies necessary to support safe, trustworthy testing across the Union.

Detail

The transition to autonomous mobility requires more than just advanced algorithms; it demands rigorous validation in diverse, real-world conditions. The proposed Cloud and AI Development Act (CADA) recognizes that cities and regions are indispensable to this process. By integrating local authorities into the EU's industrial strategy, CADA aims to reduce fragmentation and accelerate the deployment of "software defined vehicles" and autonomous driving solutions.

Recital 19: The Mandate for Local Cooperation

The policy foundation for local involvement is found in Recital 19 of the CADA proposal. This recital explicitly addresses the automotive sector, stating that the Cloud and AI Leadership Initiatives should "reduce obstacles to test and deploy AI models, in particular within cities and regions contributing to the development of Union leadership in software defined vehicles and autonomous driving."

Crucially, the recital goes further by outlining a specific cooperation mechanism. It states that "Member States should facilitate the development, testing and deployment of AI systems for autonomous driving, including through cooperation with the Centres for AI, the automotive industry, suppliers, cities and regions, with a view to enabling the safe and trustworthy deployment of AI-enabled connected and autonomous mobility solutions across diverse European environments."

This provision establishes a clear operational model:

Member States bear the responsibility to facilitate and coordinate.
Centres for AI act as the technical hubs connecting innovation with deployment.
Cities and Regions provide the essential "diverse European environments" required for validation.

The emphasis on "diverse European environments" acknowledges that an autonomous vehicle tested only in one type of climate or road infrastructure cannot be considered safe for the entire Union. CADA would thus encourage a distributed testing network across the EU.

The Role of Experience and Acceleration Centres for AI

To operationalize the cooperation mandated in Recital 19, Article 5 of CADA establishes a network of Experience and Acceleration Centres for AI (Centres for AI). Each Member State is required to establish these centres, building upon the existing network of European Digital Innovation Hubs (EDIHs).

For cities and regions, these Centres serve as the primary interface for accessing the resources needed to support automotive testing. Under Article 5(2), the objectives of these centres include:

Supporting the integration and scaling-up of AI use cases in strategic industrial sectors, which explicitly includes automotive applications.
Accelerating the broad adoption of cloud and AI technologies at regional and local levels.
Leveraging relevant infrastructure to accelerate the development and fine-tuning of AI models and systems.

Article 5(3) further tasks these centres with helping organizations accelerate their digital transformation by connecting them with European providers of cloud and AI technologies. In the context of automotive testing, this means a city wishing to validate autonomous vehicles can partner with its local Centre for AI to access necessary computational resources, expertise, and validation tools. The Centres would act as the bridge between local physical infrastructure and the broader EU cloud ecosystem.

National Strategies and Local Alignment

The success of this local testing framework depends on alignment with broader national strategies. Article 7 requires Member States to adopt national cloud and AI strategies within one year of the Regulation's entry into force. These strategies must include measures to accelerate the development and adoption of cloud and AI at national, regional, and local levels.

Specifically, Article 7(2)(b) requires these national strategies to include measures supporting the Centres for AI as entry points to the European AI innovation ecosystem. For cities and regions, this implies that local testing initiatives for autonomous vehicles should be explicitly supported and funded within these national frameworks. Local authorities would be expected to align their spatial planning, mobility strategies, and procurement activities with these national priorities to ensure coherence and access to EU-level support.

Real-World Validation Environments and Physical AI

The proposal places a strong emphasis on the need for "real-world environments" for testing. This is critical for Physical AI, a category defined in the proposal as AI systems capable of perceiving the physical environment and executing complex actions, such as autonomous vehicles and drones.

Article 4(4), under operational objective 4, mandates that the Cloud and AI Leadership Initiatives support the "development, testing and validation in real-world environments of physical AI models and systems." This includes specific support for robotics and autonomous vehicles. The proposal aims to facilitate access to computing resources and high-quality data, which are prerequisites for validating these systems in urban settings.

While CADA does not create a new permitting regime for testing vehicles on public roads (which remains under national and local transport law), it creates the digital and computational infrastructure to support such testing. By fostering the deployment of AI factories and edge computing nodes, CADA would ensure that the massive volumes of data generated by testing in cities can be processed efficiently and securely within the Union.

Procurement and the EuroCloud Federation

Public sector bodies in cities and regions play a dual role: as facilitators of testing environments and as procurers of the resulting technologies. Article 32 introduces Union added value criteria for public procurement of cloud computing services and AI systems. This encourages contracting authorities to prioritize solutions that strengthen the EU's digital supply chain, which can include locally developed or tested autonomous driving technologies.

Furthermore, the EuroCloud Federation (established under Article 34) allows for the sharing of data centre services and cloud computing services between public sector bodies. This mechanism could be leveraged by cities and regions to share the computational load required for processing large volumes of data from autonomous vehicle testing. By pooling resources, local authorities could achieve greater cost-efficiency and ensure data sovereignty, keeping sensitive testing data within the Union's secure cloud infrastructure.

What this means for you

For public-sector officers, urban planners, and procurement managers in cities and regions, CADA presents a structured pathway to support automotive AI testing:

Engage with Centres for AI: Identify your regional Centre for AI (based on EDIHs). They are your designated partner for accessing technical expertise, testing facilities, and European cloud resources. Collaborate with them to design local testing frameworks for autonomous mobility that align with Recital 19's cooperation model.
Align with National Strategies: Ensure your local smart city or mobility strategies are explicitly aligned with your Member State's national cloud and AI strategy (Article 7). This alignment is crucial for accessing EU funding and support mechanisms linked to the Cloud and AI Leadership Initiatives.
Facilitate Diverse Testing Environments: While you do not regulate the AI code itself, you control the physical environment. Work with the automotive industry and suppliers to create safe, designated testing zones in your city. Use the cooperation mechanisms highlighted in Recital 19 to ensure these zones are equipped with the necessary digital infrastructure (e.g., edge computing nodes) supported by CADA.
Leverage Union Added Value in Procurement: When procuring AI systems or cloud services for smart mobility projects, apply the Union added value criteria (Article 32). Prioritize tenders that demonstrate contribution to the European cloud and AI ecosystem, such as those using European hardware or software, or those developed in cooperation with local entities.
Participate in the EuroCloud Federation: Consider joining the EuroCloud Federation (Article 34) to share data centre capacity and cloud computing services with other public sector bodies. This can reduce costs and improve the resilience of the infrastructure supporting your automotive testing initiatives.

Common misconceptions

Misconception 1: CADA regulates the physical testing of autonomous vehicles on public roads. Correction: CADA does not replace national traffic laws or vehicle type-approval regulations. It focuses on the cloud and AI ecosystem that underpins these vehicles. It facilitates the computational infrastructure, data processing, and software validation environments, but the physical authorization for testing remains under local and national transport authorities.

Misconception 2: Cities are solely responsible for funding AI testing infrastructure. Correction: CADA establishes a multi-level governance model. While cities provide the environment, Member States must adopt national strategies (Article 7) and the EU provides funding through the Cloud and AI Leadership Initiatives. The Centres for AI act as intermediaries to distribute resources and expertise.

Misconception 3: All cloud services used for automotive testing must be from EU providers. Correction: CADA introduces a sovereignty framework with four assurance levels (Article 16). While public sector bodies handling critical data must procure services with higher assurance levels (Levels 2-4), not all services are restricted to EU-only providers. However, the proposal strongly encourages the use of sovereign services to mitigate risks related to third-country access and operational continuity.

Misconception 4: CADA mandates the use of open-source software for all automotive AI. Correction: Article 41 encourages the use of open-source solutions and open standards to ensure transparency and reduce vendor lock-in. However, it does not mandate open-source for all applications. It promotes open-source where it enhances security, interoperability, and technological autonomy, allowing for a balanced approach based on functional needs.

This is general information about a draft EU regulation, not legal advice.