Securing Europe's Digital and Industrial Future – a hearing on the Cloud and AI Development Act (CADA) and Chips Act 2.0 - EPP Group in the European Parliament

CADA and Chips Act 2.0 are not two separate bills—they are the top and bottom halves of a single full-stack sovereignty architecture. Act 1.0 put wafers in EU soil; 2.0 extends the perimeter to design IP, advanced packaging, and AI workloads. CADA seals the loop by subjecting cloud and model training to the same jurisdictional logic as the silicon beneath. The technical cascade is immediate. A 3nm AI accelerator now faces EU traceability across EDA, foundry process, HBM, and datacenter deployment. ASML's service contracts, TSMC's (Taiwan, China) EU roadmap, and the HBM triopoly's packaging all face new localization layers. The real cost is the compliance tax, not capex. Hyperscalers navigate US export controls and EU data-residency mandates simultaneously—bifurcating global cloud into three regulatory silos. Expect Washington to tighten CHIPS clawback provisions. Beijing will accelerate domestic substitution. The EU is no longer a symbolic third pole—it is a market force with binding regulatory teeth. Within 18 months, the "sovereignty premium" will be explicitly priced into every semi and cloud contract. Mid-tier fabless designers, unable to fund three compliance stacks, will be the first margin casualties.