CADA

The Cloud and AI Development Act (CADA) is a proposed European Union regulation designed to accelerate Europe's sovereign digital infrastructure by directing public procurement towards European cloud and AI providers, setting interoperability requirements for data portability, and potentially creating preferential frameworks for EU-headquartered technology companies in sensitive government contracts. The proposal emerged from the competitiveness agenda set out in the Draghi Report and from lobbying by European cloud providers and AI companies seeking regulatory support to compete against the entrenched market positions of US hyperscalers.

As of 2025, CADA is in the Commission consultation phase and has not yet been formally tabled as legislation. Its exact scope and obligations remain contested, with US technology companies arguing it constitutes discriminatory industrial policy that would breach WTO commitments and bilateral trade agreements. European cloud providers including OVHcloud, Hetzner, and Scaleway have publicly supported its passage. The act is also discussed as a potential vehicle for cloud switching requirements that would complement the EU's Digital Markets Act cloud probes against AWS and Azure.

CADA represents the regulatory complement to the market-oriented initiatives already underway. Where GAIA-X sets voluntary interoperability standards and the DMA targets specific anticompetitive practices, CADA would create positive incentives for European providers through procurement rules and possibly investment subsidies. Sceptics warn that procurement mandates may entrench existing European providers rather than creating genuine competition, and that without a comparable investment in capability, European cloud firms cannot close the technical gap with AWS and Azure regardless of regulatory support.