What must Czechia include in its national cloud and AI strategy under CADA?

Under the proposed Cloud and AI Development Act (CADA), Czechia would be required to adopt a national cloud and AI strategy within one year of the regulati

Summary Under the proposed Cloud and AI Development Act (CADA), Czechia would be required to adopt a national cloud and AI strategy within one year of the regulation's entry into force. As proposed in Article 7, this strategy is not a voluntary policy paper but a binding instrument that must include eight specific mandatory elements. These include measures to support SMEs and SMCs, deploy data centre capacity, and invest in high-intensity computing infrastructure such as AI factories and quantum computers. Crucially, the strategy must incorporate the 'AI first' principle and be notified to the European Commission within three months of adoption. Czechia would also be obligated to review and update the strategy at least every three years based on key performance indicators.

Detail

Article 7 of the proposed CADA (COM(2026) 502 final) establishes the legal framework for national cloud and AI strategies. As proposed, these strategies serve as the primary mechanism for Member States to align their domestic policies with the Union's broader objectives for technological sovereignty, competitiveness, and resilience. The regulation explicitly requires that these strategies contribute to the digital targets established under the Digital Decade Policy Programme 2030, ensuring a coordinated approach across the single market.

For Czechia, compliance with Article 7 involves a structured process of drafting, adopting, notifying, and maintaining a comprehensive strategic document. The regulation mandates that the strategy be consistent with the objectives of CADA and, where gaps exist in existing national strategies, those strategies must be updated to meet the new requirements.

The Eight Mandatory Elements of the National Strategy

Article 7(2) explicitly enumerates the minimum content that Czechia's national strategy must include. These eight elements, listed from (a) to (h), form the core of the compliance obligation. Failure to address any of these points would render the strategy non-compliant with the proposed regulation.

Key Objectives, Priorities, and Governance (Art. 7(2)(a)) The strategy must define the key objectives and priorities for cloud and AI adoption. Crucially, these objectives must be in line with the 'AI first' principle. As defined in the Apply AI Strategy and referenced in the CADA explanatory memorandum, this principle urges organisations to reflect on their business processes by considering the needs and opportunities offered by AI, while simultaneously taking into account potential risks. The strategy must also include a robust governance and monitoring framework to ensure these objectives are achieved.
Acceleration at National, Regional, and Local Levels (Art. 7(2)(b)) Czechia must outline specific measures to accelerate the development and adoption of cloud and AI at national, regional, and local levels. This element explicitly targets public sector bodies, small and medium-sized enterprises (SMEs), and small mid-cap enterprises (SMCs). The strategy is required to support the network of Centres for AI (formerly European Digital Innovation Hubs) as entry points to the European AI innovation ecosystem, ensuring that smaller entities have access to the necessary expertise and infrastructure.
Broad Deployment in Strategic Sectors (Art. 7(2)(c)) The strategy must include measures to support the broad deployment and uptake of AI in strategic industrial and public sectors. The regulation explicitly highlights healthcare, energy, and mobility as priority areas where AI adoption should be accelerated. This ensures that the strategy addresses sectors critical to the Union's economic security and public welfare.
Data Centre Capacity Deployment (Art. 7(2)(d)) Czechia must detail measures to support the deployment of data centre capacity. The regulation specifies a focus on high-value data centres that deliver significant economic and societal benefits. Furthermore, these facilities must adhere to high environmental and energy-efficiency standards, aligning with the EU's broader sustainability goals.
High-Intensity Computing Infrastructure (Art. 7(2)(e)) The strategy must include measures to invest in high-intensity computing infrastructure. This element explicitly mandates the inclusion of AI factories, AI gigafactories, and quantum computers. These are to be treated as strategic national and cross-border assets that support research, development, and industrial AI deployment across strategic sectors. This provision signals a shift towards treating advanced compute capacity as a critical national asset.
Cloud and AI Capabilities and Public Procurement (Art. 7(2)(f)) Czechia must outline measures to support the development of cloud and AI capabilities and promote excellence and innovation. This includes specific public procurement measures and public procurement of innovation measures as set out in Article 33 of CADA. This element ensures that public spending is leveraged to drive market innovation and support the development of European technologies.
Open Hardware and Software Stacks (Art. 7(2)(g)) The strategy must support the development of cloud computing stack technologies built upon open hardware and software. The stated goal is to strengthen technological sovereignty and enhance the competitiveness of strategic European industries. This reflects the CADA's broader emphasis on open source as a lever for reducing dependencies on third-country providers.
Accessibility of High-Quality Data (Art. 7(2)(h)) Finally, the strategy must include measures to ensure the accessibility of high-quality data for AI development. This involves notably preventing data bottlenecks encountered by organisations. By addressing data availability, the strategy aims to remove a key barrier to AI innovation and deployment within Czechia.

The 'AI First' Principle

The 'AI first' principle is a recurring and mandatory theme in CADA, particularly within the context of national strategies under Article 7(2)(a). It is not merely a slogan but a required component of the strategic objectives. By integrating this principle, Czechia's strategy must encourage organisations to proactively consider AI opportunities in their core business processes. However, the regulation explicitly mandates that this consideration must be balanced with a thorough assessment of potential risks, ensuring that adoption is responsible and aligned with EU values. The principle is defined in the Apply AI Strategy as urging organisations to reflect on their business processes, considering the needs and opportunities offered by AI, while taking into account potential risks.

Support for SMEs and SMCs

CADA places significant emphasis on supporting smaller entities. Article 7(2)(b) requires measures specifically targeting SMEs and SMCs (small mid-cap enterprises). The regulation defines SMCs via reference to Commission Recommendation (EU) 2025/1099. This inclusion acknowledges that mid-sized companies are often the backbone of industrial innovation but may lack the resources of larger incumbents. The strategy must therefore include concrete mechanisms, such as access to Centres for AI, to help these entities scale their AI adoption and compete in the single market.

Data Centres and High-Intensity Compute

The proposal responds to the EU's capacity gap by mandating a strategic focus on infrastructure. Article 7(2)(d) and (e) are critical here. Czechia must not only plan for data centre deployment but also ensure these facilities are high-value and energy-efficient. Furthermore, the explicit mention of AI factories, AI gigafactories, and quantum computers in Article 7(2)(e) signals a shift towards treating these as critical national assets. This aligns with the broader EU goal of tripling data centre capacity and reducing dependence on third-country providers.

Deadlines and Reporting Obligations

Timing is a critical compliance factor under Article 7. As proposed, the following deadlines and obligations apply to Czechia:

Adoption Deadline: Member States must establish their national strategies by the same day as the entry into force of the Regulation plus one year (Article 7(1)). Given that CADA is a proposal, the exact date depends on the final legislative procedure, but the one-year window from entry into force is fixed.
Notification: Once adopted, Czechia must notify the Commission of its national strategy within three months of adoption (Article 7(5)).
Review Cycle: The strategy is not a static document. Member States must assess their national strategies at least every three years based on key performance indicators and update them where necessary (Article 7(5)).
Consistency: The strategy must be consistent with the objectives of CADA (Article 7(3)) and contribute to the digital targets of the Digital Decade Policy Programme 2030 (Article 7(4)).

Role of the European Artificial Intelligence Board

Article 7(6) introduces the European Artificial Intelligence Board (AI Board), established by the AI Act, as a key advisory body. The AI Board shall advise and assist Member States, including Czechia, in coordinating their national strategies. It will also facilitate the exchange of best practices among Member States. This means Czechia's strategy development should involve engagement with the AI Board to ensure alignment with EU-wide practices and to leverage shared expertise.

What this means for you

For in-house counsel, compliance officers, and policy advisors in Czechia, the proposed CADA introduces a direct regulatory obligation on the state that will indirectly impact corporate strategy, procurement, and investment. While the penalty provisions for failing to adopt a national strategy are a matter of EU law enforcement against the Member State, the content of that strategy will dictate the landscape in which businesses operate.

Strategic Alignment: Companies should monitor the development of Czechia's national strategy closely. The eight elements in Article 7(2) will likely translate into national funding programmes, tax incentives, or procurement preferences. For instance, if the strategy prioritises open-source stacks (Art. 7(2)(g)) or specific data centre locations (Art. 7(2)(d)), businesses may find competitive advantages in aligning their infrastructure choices with these priorities.

Procurement Opportunities: Article 7(2)(f) references public procurement of innovation. Compliance officers in the public sector or those bidding for public contracts should prepare for new award criteria that favour EU-developed technologies and open-source solutions. The strategy will likely operationalise these preferences, creating a clear market signal for suppliers.

SME and SMC Support: If your organisation qualifies as an SME or SMC, the strategy's mandatory focus on these entities (Art. 7(2)(b)) suggests upcoming support mechanisms, such as access to Centres for AI. Legal teams should advise management on leveraging these resources for AI adoption and upskilling.

Data and Infrastructure: The emphasis on high-quality data accessibility (Art. 7(2)(h)) and high-intensity compute (Art. 7(2)(e)) indicates that data governance and compute access will be central to national policy. Companies should ensure their data strategies are robust and consider partnerships with national AI factories or gigafactories if they require significant compute resources.

Timeline Awareness: With the strategy due within one year of CADA's entry into force, and notification to the Commission within three months of adoption, the legislative and policy cycle will be fast-paced. Legal teams should track the progress of the CADA proposal and the subsequent national drafting process to anticipate regulatory changes.

Common misconceptions

Misconception 1: The 'AI first' principle means AI must be used in all processes. The 'AI first' principle, as referenced in Article 7(2)(a), does not mandate the blanket adoption of AI in every business process. Instead, it urges organisations to consider the opportunities and needs offered by AI. The regulation explicitly requires taking into account potential risks, implying a balanced, risk-aware approach rather than a mandatory, indiscriminate deployment.

Misconception 2: Czechia can simply adopt an existing IT strategy. Article 7(3) requires that national strategies be consistent with the objectives of CADA. If an existing national strategy does not adequately cover the eight specific elements listed in Article 7(2), such as the specific focus on AI factories, open-source stacks, or the 'AI first' principle, it must be updated. The regulation explicitly states that if a Member State identifies gaps in its existing strategy, it should update it accordingly (Recital 33).

Misconception 3: The strategy is a one-off document. Article 7(5) mandates that Member States assess their national strategies at least every three years. This is a continuous compliance obligation. The strategy must be dynamic, adapting to technological developments and key performance indicators. Failure to review and update the strategy could lead to non-compliance with the ongoing obligations of the regulation.

Misconception 4: Only large tech companies are affected. While large providers are key players, Article 7(2)(b) explicitly requires measures to support SMEs and SMCs. The strategy is designed to foster a broad ecosystem, including smaller entities. Therefore, the regulatory impact extends beyond hyperscalers to include mid-sized businesses and public sector bodies, influencing their adoption and innovation pathways.

Official sources

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