Summary As proposed, the Cloud and AI Development Act (CADA) would push back against the concentration of computing power in a few existing hubs by rewarding projects that fill major shortages in underserved areas. The Commission would monitor the EU-wide capacity gap and identify underserved areas (Article 15), and one of the criteria for designating a "data centre strategic project" is addressing a major shortage in such an area (Article 14(1)(e)). This aims to steer support and accelerated permitting toward regions that genuinely lack capacity rather than reinforcing existing imbalances. None of this is in force yet.

Detail

The Explanatory Memorandum notes that EU data centre deployment is lagging and concentrated in a limited number of established hubs, creating structural imbalances between Member States, higher costs and worse latency for peripheral regions. CADA (COM(2026) 502 final, a proposal) responds with two linked mechanisms: EU-level monitoring of where capacity is missing, and strategic-project designation that rewards filling those gaps. The Memorandum frames the overall ambition as tripling EU capacity in the next five-to-seven years and reaching the needed capacity by 2035, "while ensuring balanced geographic deployment."

Monitoring the capacity gap (Article 15)

The foundation is the Commission's monitoring role. Under Article 15, for the purpose of monitoring progress toward the objectives of the Digital Decade Policy Programme (Decision (EU) 2022/2481), the Commission shall identify and monitor:

  1. the compute capacity available in the Union, including edge computing capacity;
  2. the volume of demand for data centre capacity; and
  3. the size of the capacity gap, and underserved areas that the Commission, in cooperation with Member States, could identify "and subsequently use[] as acceleration zones for the deployment of data centre capacity."

By mapping these gaps, the Commission can pinpoint where missing infrastructure threatens competitiveness and autonomy — and those underserved areas can feed directly into acceleration-zone designation, keeping interventions data-driven and targeted.

Strategic projects and the underserved-area criterion (Article 14)

To turn monitoring into action, Article 14 lets the Commission designate certain projects — selected through open calls for expressions of interest — as "data centre strategic projects," provided they fulfil at least two of five criteria. One criterion, Article 14(1)(e), targets geographic balance directly:

"the project addresses a major shortage of compute capacity in an area identified as having such a shortage under Article 15 and contributes significantly to the growth, development and promotion of the local economy."

This rewards projects that locate where capacity is most lacking and closes the loop with the Article 15 monitoring data: the Commission identifies the gap, and strategic-project status incentivises filling it. Strategic designation can unlock support measures by Member States (without prejudice to EU State aid rules, Articles 107 and 108 TFEU) and a competitiveness seal under the proposed European Competitiveness Fund (recitals 42 and 43).

Avoiding concentration in existing hubs

The Memorandum stresses dependence on a limited pool of providers and infrastructure concentrated in a few nodes, which forces European enterprises to route workloads through foreign hyperscalers when local capacity is short or costly. CADA does not ban investment in established hubs, but it reserves EU-level strategic recognition for projects that contribute to balance — aiming to cut latency for peripheral users, increase competition in new markets and diversify the geographic footprint of EU digital infrastructure.

Linking zones and monitoring

While Article 14 handles project designation, the acceleration-zone framework (Articles 10–13) supports balance too. Member States must designate at least one acceleration zone where capacity is being deployed (Article 10), and the Article 15 monitoring helps ensure zones — and strategic projects — are aimed at areas that genuinely need capacity.

What this means for you

For public-sector and procurement officers shaping regional digital strategies and evaluating tenders:

  • Align procurement with strategic goals. Favouring providers that invest in underserved areas can help meet Digital Decade targets and EU autonomy objectives.
  • Promote local strategic designation. If your region shows a gap under Article 15, you can support local projects pursuing strategic status under Article 14(1)(e), which can unlock Member State support measures and faster permitting.
  • Use the Commission's data. Capacity-gap monitoring under Article 15 will provide authoritative figures you can cite to justify local investment or negotiate with providers.
  • Weigh local economic impact. Article 14(1)(e) expressly rewards contribution to "the growth, development and promotion of the local economy" — consider jobs and supply-chain effects alongside technical specs.

Common misconceptions

  • "CADA bans investment in existing hubs." No. It does not prohibit new construction in established hubs. It reserves EU strategic designation and associated benefits for projects that address identified shortages in underserved areas.

  • "The Commission will build data centres in underserved areas." No. The Commission monitors the gap and may designate private or public projects as strategic; the actual investment and construction are carried out by operators.

  • "Any project in an underserved area is automatically strategic." No. A project must meet at least two of the five Article 14(1) criteria and be selected through an open call for expressions of interest. Locating in a gap area alone is not enough.

Official sources

Related

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