Summary Under the proposed Cloud and AI Development Act (CADA), the eligibility rule for recognition as a frontier AI priority project is set out in Article 8(b). The provision offers two alternative routes for the entity undertaking the project: it may be either a European digital infrastructure consortium (EDIC) established pursuant to Decision (EU) 2022/2481, or another legal entity eligible for funding under Union law. The EDIC route is therefore not the only path, and other legal entities are not categorically excluded. Whichever route applies, the project must involve the participation of at least three Member States. Recognition is not granted on application alone: under Article 8, the Commission may, by decision, recognise projects selected through open calls for expression of interest, so applicants respond to a Commission call rather than apply unilaterally. Because CADA is a proposal — COM(2026) 502 final — these criteria could change before adoption.

Detail

The proposed Cloud and AI Development Act (CADA) sets up a mechanism to support and scale up frontier AI technologies within the Union. Central to that mechanism is recognition of "frontier AI priority projects," which are tied to grand challenge 3 set out in Annex I. Article 8 governs both how recognition happens and who may undertake a qualifying project. As CADA remains a legislative proposal, the analysis below describes draft text that has not entered into force and that may be amended during the legislative process.

The framing of Article 8

Article 8 provides that "[t]he Commission may, by means of a decision, recognise as frontier AI priority projects, projects selected through open calls for expression of interest that support grand challenge 3 set out in Annex I, provided that the following criteria are fulfilled." Three features of this opening matter for the "who can apply" question.

First, recognition is discretionary ("may") and takes the form of a Commission decision. Second, the candidates are "projects selected through open calls for expression of interest." Applicants do not file a freestanding application at a time of their choosing; they respond to a call published by the Commission, and the Commission then selects and recognises projects through a decision. Third, recognition is conditional on the cumulative criteria in points (a), (b) and (c). The eligibility-of-applicant question is answered principally by point (b), read together with the selection mechanism in the chapeau.

Who may undertake the project: Article 8(b)

The core eligibility text is Article 8(b), which requires that the project "is undertaken by a European digital infrastructure consortium established pursuant Decision (EU) 2022/2481 or another legal entity eligible for funding under Union law and it involves the participation of at least three Member States."

This provision sets out two alternative routes for the entity undertaking the project, joined by "or":

  1. A European digital infrastructure consortium (EDIC) established pursuant to Decision (EU) 2022/2481. An EDIC is a legal vehicle created under Decision (EU) 2022/2481 (the Digital Decade Policy Programme) to let Member States jointly implement multi-country digital infrastructure projects. It has legal personality and is open to Member State participation. This is the route the draft text names first.

  2. Another legal entity eligible for funding under Union law. This is a genuine alternative, not a fallback subordinate to the EDIC route. Where the entity undertaking the project is not an EDIC, it qualifies under (b) if it is a legal entity eligible for funding under Union law. Recital 34 (in paraphrase) reinforces this breadth, describing broad participation from entities across the Union, in particular through EDICs established pursuant Decision (EU) 2022/2481 "or any other legal structure capable of representing a meaningful share of the Union's interest."

The practical consequence is important and is the point on which earlier informal summaries of the proposal have most often erred: eligibility is not limited to EDICs. A non-EDIC legal entity may undertake a recognised project, provided it is eligible for funding under Union law and the three-Member-State participation condition is met. Whether a particular entity is "eligible for funding under Union law" turns on the relevant Union funding rules applicable to the call in question; the draft does not, on the verbatim text supplied, restrict that category by reference to public or private ownership.

The three-Member-State participation requirement

Both routes in Article 8(b) share a common condition: the project must "involve the participation of at least three Member States." This is a single floor that attaches to the project regardless of which entity undertakes it. The phrase "at least three" sets a minimum, not a ceiling — projects involving more than three Member States are not thereby disqualified, and nothing in the supplied text caps participation.

The requirement signals that recognised projects are intended to be collaborative and cross-border rather than isolated national efforts. Recital 34 (in paraphrase) explains the rationale: frontier AI projects require a collaborative Union-level approach given their technical complexity and capital intensity, and should involve broad participation from entities across the Union.

The resource-pooling condition: Article 8(c)

Eligibility under (b) is necessary but not sufficient. Article 8(c) adds that "the participating Member States pool computing time and other relevant resources to support the implementation of the designated project." This pooling obligation falls on the participating Member States and is a separate cumulative criterion. A project that satisfies the entity and three-Member-State conditions in (b) but does not feature resource pooling would not meet the full set of criteria in Article 8.

The "pioneering" condition: Article 8(a)

The first cumulative criterion, Article 8(a), requires that the project "is a pioneering project, focused on the support and scaling-up of frontier AI technologies." This is a substantive, project-quality condition that sits alongside the entity and participation conditions. It does not narrow the class of eligible applicants, but it does mean that an otherwise eligible applicant must put forward a project that is genuinely pioneering and directed at supporting and scaling up frontier AI.

How the criteria fit together

Reading the chapeau with points (a) to (c), recognition requires, cumulatively: a project selected through an open call for expression of interest supporting grand challenge 3 (chapeau); a pioneering project focused on supporting and scaling up frontier AI (a); an undertaking by an EDIC or another Union-funding-eligible legal entity, with participation of at least three Member States (b); and pooling of computing time and other relevant resources by the participating Member States (c). The Commission then exercises a discretion ("may") to recognise the project by decision.

What this means for you

For in-house counsel and advisers to technology firms, research institutions, public bodies and consortia, the structuring questions are concrete.

1. Choose the route under Article 8(b)

Assess whether the project is better placed to be undertaken by an EDIC or by another legal entity eligible for funding under Union law. The second route exists precisely so that entities outside the EDIC framework can lead a qualifying project. Do not assume an EDIC is mandatory; on the draft text, it is one of two alternatives.

2. Confirm Union-funding eligibility

If you intend to rely on the "another legal entity" route, verify that the entity is eligible for funding under Union law, by reference to the funding rules applicable to the relevant call. This is the gating condition for the non-EDIC route and should be diligenced early.

3. Secure at least three Member States

Whichever route you choose, the project must involve the participation of at least three Member States, and those participating Member States must pool computing time and other relevant resources (Article 8(c)). Document the participating States' commitments and contributions, as these conditions are cumulative and will be tested.

4. Track the open calls

Recognition runs through open calls for expression of interest. Monitor the Commission's calls supporting grand challenge 3, because selection and recognition operate within that process rather than on an open-ended application basis.

5. Build the "pioneering" case

Prepare documentation showing the project is pioneering and focused on supporting and scaling up frontier AI (Article 8(a)), alongside evidence on the entity, the participating Member States, and resource pooling.

Because CADA is a proposal, treat all of the above as provisional and revisit it as the text develops.

Common misconceptions

Misconception 1: Only an EDIC can have a project recognised. Reality: Article 8(b) sets out two alternative routes — an EDIC established pursuant to Decision (EU) 2022/2481 or another legal entity eligible for funding under Union law. The EDIC route is not the only path.

Misconception 2: Private or other legal entities are categorically excluded as the entity undertaking the project. Reality: They are not categorically excluded. A non-EDIC legal entity may undertake a recognised project if it is eligible for funding under Union law and the three-Member-State participation condition is met. The verbatim text does not exclude entities by reference to private ownership.

Misconception 3: Involving one or two Member States is enough. Reality: Article 8(b) requires the participation of at least three Member States. "At least three" is a minimum floor, not a cap.

Misconception 4: The project only needs to be innovative. Reality: Being "pioneering" (Article 8(a)) is one criterion. The entity and participation conditions in Article 8(b) and the Member-State resource-pooling condition in Article 8(c) are cumulative and equally required.

Misconception 5: Recognition is automatic on application. Reality: Under Article 8 the Commission "may, by means of a decision, recognise" projects selected through open calls for expression of interest. Recognition is discretionary and competitive; applicants respond to a call, and not every eligible candidate is recognised.

Official sources

Related

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