Summary Under the proposed Cloud and AI Development Act (CADA), operational objective 2 is a targeted initiative to build the foundational hardware and software layers required for European technological autonomy. As defined in Article 4(2), this objective mandates the development of "secure, resilient and performant open cloud computing stacks" that span from on-device edge to backend service layers. Crucially, it requires the creation of AI-optimised servers based on processors and accelerators designed and manufactured in the Union, the fostering of open-source software foundations, and the establishment of a central catalogue of European open cloud computing solutions. This is not merely a software initiative but a holistic hardware-software co-design effort intended to bridge the Union's critical capacity gaps and reduce reliance on non-European infrastructure.

Detail

Operational objective 2 is one of eight specific operational goals established under the Cloud and AI Leadership Initiatives in Title II of the proposed CADA (COM(2026) 502 final). While the broader general objective of these initiatives is to promote research, innovation, and large-scale capacity throughout the Union's cloud and AI ecosystem (Article 3), operational objective 2 specifically targets the structural integrity and sovereignty of the technology stack itself.

As explicitly set out in Article 4(2), the Cloud and AI Leadership Initiatives shall pursue five distinct measures to achieve this objective:

1. Developing Open Cloud Computing Stacks

The primary measure is to "develop and pilot secure, resilient and performant open cloud computing stacks." The proposal defines the scope of these stacks comprehensively, covering the entire technology spectrum required for modern cloud operations. This includes:

  • On-device edge capabilities;
  • Connectivity layers;
  • Data management and processing layers;
  • AI tools and frameworks;
  • Backend and service layers specifically tailored for strategic sectors.

This holistic approach ensures that the Union does not merely assemble disparate components but creates an integrated, end-to-end architecture that is secure by design and resilient against external disruptions (Article 4(2)(a)).

2. AI-Optimised Servers and EU Hardware

A cornerstone of this objective is the decoupling of European AI infrastructure from third-country hardware dependencies. Article 4(2)(b) mandates the development of "AI-optimised servers and baseline software based on processors, accelerators and quantum accelerators designed and manufactured in the Union."

This provision goes beyond simple assembly; it targets the design and manufacturing phases within the EU. It also includes the development of "next-generation ultra-high density and long-term data storage" solutions. By anchoring the hardware layer in Union-manufactured semiconductors and quantum technologies, the proposal aims to secure the physical foundation of the AI ecosystem.

3. Boosting Data Availability via Open-Source Middleware

To facilitate the flow of data necessary for AI development, the initiative seeks to "boost data availability for AI via open-source middleware platforms underpinning common European data spaces" (Article 4(2)(c)). This measure addresses the fragmentation of data across the single market by creating interoperable middleware that allows AI systems to access and process data across different sectors and borders while maintaining sovereignty and security standards.

4. Fostering Open-Source Software Foundations

Recognising that sustainable innovation requires community governance, the proposal explicitly aims to "foster the creation of open-source software foundations supporting open-source components" (Article 4(2)(d)). These foundations are intended to provide the necessary governance and coordination mechanisms to pool resources, ensuring that open-source components are not just developed but are maintained, secured, and evolved over the long term. This moves beyond ad-hoc development to a structured ecosystem of shared European digital assets.

5. Establishing a Catalogue of European Solutions

Finally, to ensure market visibility and adoption, the initiative will "establish a catalogue of European open cloud computing solutions" (Article 4(2)(e)). This catalogue will aggregate the solutions developed under the previous four measures (points a to d), creating a single, accessible repository. This tool is designed to help public and private sector buyers identify and adopt European alternatives, thereby reducing the friction of switching from non-European incumbents.

Context and Synergies

Operational objective 2 is intrinsically linked to Grand Challenge 2 outlined in Annex I of CADA, which focuses on "Cloud stacks." Grand Challenge 2 aims to "build end-to-end hardware and software cloud stacks, including AI tools, infrastructure, services and management layers to bridge the Union's critical capacity gaps." It specifically highlights the need to build "AI servers powered by semiconductors and quantum technologies designed and manufactured in the Union for distributed and decentralised cloud and edge computing for AI."

The proposal emphasises the necessity of co-design and cross-optimisation of hardware and software. Recital 14 notes that both the Cloud and AI Leadership Initiatives and the Chips for Europe Initiative 2.0 should foster the integration of AI computing infrastructures. This indicates that operational objective 2 is not an isolated software exercise but a strategic alignment of European semiconductor capabilities (processors and accelerators) with European software stacks.

Furthermore, the objective supports the broader CADA goal of reducing dependencies on third-country providers. By creating a catalogue of European open cloud computing solutions and fostering open-source foundations, CADA aims to provide European businesses and public authorities with credible, sovereign alternatives. This is reinforced by the requirement in Article 4(2)(a) that these stacks cover strategic sectors, ensuring that critical industries have access to secure and resilient infrastructure.

Implementation and Funding

The implementation of operational objective 2 will be entrusted to the Commission and Member States, and where relevant, to joint undertakings such as the Smart Networks and Services Joint Undertaking or the European High Performance Computing Joint Undertaking (Article 6(1)). The initiatives may be supported by funding from Union programmes, including Horizon Europe and the Digital Europe Programme (Article 6(3)).

To ensure the initiative remains responsive to rapid technological change, the Commission is empowered to adopt delegated acts to amend Annex I (which lists the grand challenges) to reflect technological and market developments, ensuring that the focus of operational objective 2 remains aligned with the state of the art (Article 6(4)).

What this means for you

For CTOs, hardware architects, open-source maintainers, and SMEs, operational objective 2 signals a significant shift in the European cloud landscape towards sovereign, open-source infrastructure. Here is the practical impact:

  • New Hardware Opportunities: If you are involved in hardware design or manufacturing, there is a clear policy push for AI-optimised servers using EU-designed processors and accelerators. Projects that demonstrate the use of these components may be eligible for support under the Cloud and AI Leadership Initiatives, potentially unlocking funding for R&D and pilot deployments.
  • Open-Source Participation: The fostering of open-source software foundations means increased funding and coordination for open-source projects. Developers and SMEs contributing to these foundations may benefit from pooled resources, governance support, and a structured pathway to market adoption.
  • Catalogue Visibility: The establishment of a catalogue of European open cloud computing solutions provides a new channel for visibility. If your solution is developed under these initiatives, it will be listed in a centralised repository, making it easier for public and private sector buyers to discover European alternatives, potentially influencing procurement decisions.
  • Strategic Sector Focus: The emphasis on stacks for strategic sectors (such as healthcare, energy, and finance) means that solutions addressing the specific needs of these industriesβ€”particularly in terms of security, resilience, and data sovereigntyβ€”will be prioritised. Architects should align their development roadmaps with the security and interoperability requirements of these sectors.
  • Interoperability and Data Spaces: The development of open-source middleware for European data spaces suggests a move towards standardised, interoperable data interfaces. Architects should prepare for integration with these common platforms to ensure their AI systems can access and process data efficiently within the EU ecosystem, avoiding vendor lock-in.

Common misconceptions

"Operational objective 2 is only about software." This is incorrect. Article 4(2)(b) explicitly includes the development of "AI-optimised servers and baseline software based on processors, accelerators and quantum accelerators designed and manufactured in the Union." It is a hardware-software co-design initiative that targets the physical silicon layer as much as the code layer.

"It replaces the AI Act." No. CADA complements the AI Act. While the AI Act focuses on safety, fundamental rights, and market harmonisation for AI systems, CADA focuses on building the underlying infrastructure, compute capacity, and technological sovereignty. Operational objective 2 builds the stack; the AI Act regulates the systems running on it.

"Only large incumbents can benefit." The proposal specifically aims to foster open-source software foundations and create a catalogue of solutions, which lowers barriers to entry for SMEs. The emphasis on open standards and open-source components is designed to enable a diverse set of providers to compete, rather than reinforcing vendor lock-in by large hyperscalers.

"It forces immediate migration to EU stacks." CADA is a proposal and focuses on "supporting," "developing," and "pilot[ing]" these stacks (Article 4(2)). It does not immediately mandate the use of these stacks for all private sector actors. However, it lays the groundwork for future procurement preferences and sovereignty requirements that may incentivise adoption over time, particularly for public sector bodies.

Official sources

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