On July 2, 2026, the European Commission proposed the new Cloud and AI Development Act (the “Act”), a legislative initiative intended to expand Europe’s cloud and data center capacity and strengthen the infrastructure needed to advance the European Union’s (“EU”) broader artificial intelligence (“AI”) objectives. 

The proposal sits within the European Commission’s AI Continent Action Plan (the “Action Plan”), a strategy built with the goal of helping Europe to become a “leading AI continent.” As described by the European Commission, the Action Plan and accompanying Act are designed to create conditions that encourage large-scale investment in cloud and edge capacity across the EU. The Action Plan has principal objectives including to expand the EU’s AI computing capacity, improve access to high-quality data, reinforce the EU’s AI skills base, and facilitate implementation of the EU AI Act.

The proposed Act is intended to accelerate investment in cloud, edge and data center infrastructure across the EU by addressing barriers such as lengthy permitting processes, site constraints and energy access challenges. According to the European Commission, the aim is triple the EU’s data center capacity within the next five to seven years so that it can better meet the needs of EU businesses and public administrations by 2035.  Projects that satisfy requirements tied to resource efficiency and innovation could benefit from simplified permitting and other public support measures, while environmental safeguards and public health protections remain in place. 

The proposed Act also seeks to ensure highly secure EU-based cloud capacity for critical use cases, including certain AI applications where sovereignty and operational autonomy are seen as essential. More broadly, the European Commission says the Act would build on the EU Data Act’s cloud switching provisions and explore the creation of a common EU marketplace for cloud capacity and services in order to support a more diverse set of cloud providers.  

The European Commission has invited stakeholders to share their views on the Act as part of the public consultation on the Action Plan. The consultation period runs from July 2, 2026, to August 27, 2026.  

See the Action Plan press release here. See the Action Plan here. See the consultation here.