Summary As proposed, the Cloud and AI Development Act (CADA) aims to triple the EU's data-centre capacity within five to seven years and to reach the capacity the Union needs by 2035. The explanatory memorandum frames this as more than raw volume: it calls for balanced geographic deployment so all Member States gain low-latency, sustainable infrastructure. The Commission would monitor progress and identify capacity gaps under Article 15. CADA is a proposal and is not yet in force.

Detail

The ambition to triple EU compute capacity is a central theme of the proposed Cloud and AI Development Act (CADA). The explanatory memorandum treats computing infrastructure as a strategic resource for the EU's economic security, sovereignty, and competitiveness — not merely a technical asset — and ties the expansion to the Digital Decade targets in Decision (EU) 2022/2481.

The capacity trajectory

The CADA memorandum sets out an ambitious path: it "aims to triple EU capacity in the next five-to-seven years and reach the needed capacity by 2035, while ensuring balanced geographic deployment across Member States." The recitals elaborate intermediate milestones, including at least tripling capacity by 2030 as a stepping stone toward the 2035 goal. This expansion is presented as necessary to meet demand driven by AI workloads and to reduce reliance on foreign infrastructure.

Why triple capacity?

The memorandum gives several reasons:

  • Reducing external dependence: Three non-EU hyperscalers control over 70% of the European cloud market, and the market share of EU providers fell from 29% in 2017 to 15% in 2022 and has remained stagnant since. Expanding capacity is meant to give European providers room to grow and reduce the risk of operational discontinuity if third-country actors disrupt services.
  • Supporting AI development: Surging AI demand means European enterprises often route critical workloads through foreign hyperscaler infrastructure, raising sovereignty and operational-autonomy concerns.
  • Economic and strategic resilience: Insufficient capacity makes the EU a less attractive destination for tech investment, working against the goal of becoming an "AI continent."

Balanced geographic deployment

CADA, as proposed, stresses not just how much capacity is built but where. The memorandum notes that deployment is currently concentrated in a few established hubs, creating imbalances, higher costs, and higher latency for peripheral regions. To address this, the proposal introduces data centre acceleration zones (Article 10). When designating a zone, Member States must consider factors including:

  • the location and dimension of the site, and the minimum and maximum facility size;
  • available and future power-grid capacity, including on-site storage and clean-energy generation;
  • available and future network-connectivity capacity;
  • the preference for reusing brownfield sites over greenfield sites;
  • the site's ability to function sustainably, particularly minimising environmental impacts and supporting reduced carbon emissions.

Monitoring progress: Article 15

To track progress toward the Digital Decade objectives, Article 15 would task the Commission with identifying and monitoring:

  • (a) the compute capacity available in the Union, including edge computing capacity;
  • (b) the volume of demand for data-centre capacity;
  • (c) the size of the capacity gap and underserved areas — identified by the Commission in cooperation with Member States — that could subsequently be used as acceleration zones.

This monitoring would inform recommendations and guide Member States. Where the Commission identifies a major shortage of compute capacity in an area, a data-centre project addressing it can be designated a strategic project under Article 14 (one of five alternative criteria, of which a project must meet at least two), potentially benefiting from additional support and streamlined permitting.

What this means for you

For public-sector and procurement officers, the tripling goal has practical implications:

  1. More sovereign options over time: As capacity expands, more EU-based providers should be able to offer services meeting the Union's assurance criteria, easing pressure to rely on non-EU providers for critical workloads.
  2. Geographic balance: When procuring cloud services, consider data-centre location; procuring from providers with infrastructure in underserved areas may align with CADA's balanced-deployment aims.
  3. Risk assessments and assurance levels: Under Article 29, Member States and Union entities would conduct risk assessments to set the appropriate Union assurance level. As capacity grows, sourcing from providers recognised under the sovereignty framework (Article 17) becomes more feasible for protecting public order.
  4. Strategic projects: Large-scale projects contributing to grid stability or addressing a major compute shortage may qualify as strategic projects under Article 14, with accelerated permitting and support.

Common misconceptions

  • "Tripling capacity means ignoring sustainability."
    • Reality: CADA links expansion to sustainability. Sustainability requirements for acceleration zones would use key performance indicators from Delegated Regulation (EU) 2024/1364 under the Energy Efficiency Directive (Article 11), and the Leadership Initiatives support energy- and water-efficiency technologies such as innovative cooling and waste-heat utilisation (Article 4).
  • "Only large hyperscalers will benefit."
    • Reality: While large players will expand, CADA includes measures to support smaller and European providers — for example, Union added-value award criteria in public procurement (Article 32) and support for open cloud computing stacks (Article 4).
  • "The Commission will force Member States to build data centres."
    • Reality: The Commission would monitor capacity and identify gaps (Article 15) and may issue recommendations, but Member States are responsible for designating acceleration zones and deploying capacity. The Commission does not mandate specific construction projects.

Official sources

Related

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