Henna Virkkunen, Vice‑President of the European Commission, told Portfolio that Europe urgently needs to reduce critical technological dependencies because external exposure in cloud services, artificial intelligence (AI) and chip supply can become a geopolitical weapon. She stressed that the EU should not close itself off, but rather build its own capacities, strengthen European alternatives and use public procurement to create demand for domestic technologies.
How severe is the dependence?
According to the European Commission, Europe depends on external providers for roughly 80 percent of its cloud services and AI technologies. Virkkunen warned that this situation developed over decades as global partnerships appeared natural; in today’s geopolitical climate such dependencies can be weaponized.
The Commission urges member states to carry out risk assessments of cloud services used in the public sector. For the most sensitive areas it is important that European actors control the cloud and that data remain in Europe.
Tools proposed: Cloud and AI Development Act and procurement
Virkkunen discussed the recently proposed Cloud and AI Development Act, whose aim is to increase demand for European cloud services. The proposal includes a four‑tier sovereignty and security classification for cloud services; the highest sovereignty tier would be deliverable only by European companies, covering areas such as defence, external and internal security and the most sensitive government services.
She said public procurement could be a powerful lever: if the public sector considers sovereignty criteria in addition to price, it can create real demand for smaller European providers and help them scale.
Do the European foundations exist?
Virkkunen argued Europe has world‑class research and science, a significant startup ecosystem — about 45,000 startups in the EU developing and training various technologies — and many competitive, if often smaller, companies. Major barriers remain in market access and financing, however, and too often strong European innovation is commercialised outside Europe.
Within the Commission, Virkkunen is responsible for the institution’s ICT services and said the Commission compiled a technological sovereignty roadmap reviewing roughly one hundred services to see whether European alternatives exist. Often multiple European companies must form consortia to compete with hyperscalers.
Data centres: tripling capacity and energy challenges
The technological sovereignty package estimates Europe should triple its data‑centre capacity in the coming years to keep pace with technological development. At the same time many member states face challenges securing clean and affordable energy.
Virkkunen stressed data‑centre capacity cannot all be concentrated in Northern Europe: every member state needs such infrastructure. The Commission therefore proposes that each country identify so‑called accelerator zones for data centres where energy, water and other resources are available, and invest in highly energy‑efficient technologies. In the coming weeks the Commission will also propose a data‑centre labelling system to improve transparency on energy consumption.
Regulation and simplification: AI Act and GDPR‑linked measures
Virkkunen said making Europe simpler and faster for business is a priority. She has proposed two simplification packages: one linked to the AI Act, and another currently before ministers and the European Parliament addressing the GDPR and data access rules. The aim is not to lower standards but to make rules clearer and more business‑friendly. She is committed to implementing the AI Act in an innovation‑friendly way; Europe’s coherent, risk‑based approach contrasts with the United States, which lacks a federal AI law and has a patchwork of state rules.
Chips Act 2.0: focus on AI chips and moving up the value chain
Another key element of the sovereignty package is Chips Act 2.0. Virkkunen said the original Chips Act focused strongly on traditional, legacy chips — still important for supply‑chain resilience — but the new emphasis will be more demand‑side oriented. Europe must create greater demand for designing and manufacturing AI chips.
The market is changing fast: some estimates suggest that by 2030 a large share of the global chip value (around 70 percent) will relate to AI chips. While Europe has smaller companies designing AI chips, industrial‑scale capacity is needed. The aim is to link key industries — defence, automotive, telecommunications and data centres — so Europe can design and produce more advanced chips and move up the value chain.
Engagement with Hungary: opportunities and cooperation
Virkkunen held meetings with Hungarian government representatives, including Prime Minister Magyar Péter and Zoltán Tanács, the minister responsible for the scientific portfolio. They discussed government priorities; Virkkunen noted the new Hungarian government had launched many reforms in a short period and emphasised Hungary’s strong research base, startups and industrial infrastructure as significant potential for technology and digitalisation.
Hungary’s amended recovery plan includes joining initiatives such as IRIS² and the AI Factory and Gigafactory projects. Virkkunen welcomed these moves: IRIS² targets space technology, while AI Factory and Gigafactory aim to accelerate innovation and increase computing capacity — essential for training advanced AI models — and could help integrate Hungary more deeply into European technology and AI efforts.
Summary
Virkkunen’s message is clear: Europe should remain open to partners but must build its own capacities in critical technologies because current external dependencies pose geopolitical risks. The Cloud and AI Development Act, Chips Act 2.0, tripling data‑centre capacity, smarter public procurement and regulatory simplification together aim to create stronger European alternatives and reduce strategic vulnerabilities.
