Bridging the technology gap: How Europe is building its digital infrastructure
KEY POINTS
As Europe strives for strategic autonomy, it is ramping up investment in key technologies including artificial intelligence, semiconductors and cloud computing.
This structural transformation is, in turn, creating a plethora of potential opportunities for investors.
While it is widely acknowledged there is a notable gap between Europe’s overall technology ecosystem and that of the US and China, European companies nonetheless form an integral part of technology supply chains, for example in lithography equipment used in vital semiconductor manufacturing.
But Europe is actively looking to increase its ability to act independently on the world stage and grow its economy while protecting its own interests. To achieve this goal, it has rolled out several initiatives to bolster its infrastructure and cut its reliance on other countries across key areas including technology, energy, defence and more.
Technology is helping Europe lower its dependency on fossil fuels, aiding the transition to clean energy and also reducing its need to import from other countries.
Meanwhile the ability to defend against or deter threats without leaning on other countries for support is a key part of European autonomy. And it needs cutting-edge technology to achieve this: AI and cyber defence are now core components of military strategies and crucial for national security and independence.
Europe is also accelerating its investment in technology across reshoring initiatives, smart factories, clean energy deployment, and healthcare innovation, which are helping drive long‑term capital expenditure across both public and private sectors.
Targeted policy support
In June 2026, the European Commission adopted the European Technological Sovereignty Package, which is designed to raise Europe’s digital autonomy, making the bloc more resilient, competitive and independent.
The package includes multiple measures covering semiconductors, cloud computing, and artificial intelligence.
For example, the Chips Act 2.0, intends to strengthen Europe’s semiconductor industry and reduce dependence on other countries. By 2030, the global semiconductor market is expected to be worth €1.37 trillion1, and with Europe aiming to capture a larger share of this market, there are potentially multiple long-term investment opportunities.
Another element, the Cloud and AI Development Act, seeks to improve infrastructure and help meet growing demand for data centres, cloud and computing capacity, including plans to at least triple the EU’s data centre capacity within the next five-to-seven years.2
Additionally, the Strategic Roadmap for Digitalisation and AI in Energy targets electricity grid optimisation, energy efficiency and decarbonisation. It intends to increase the grid’s resilience, reduce costs for businesses and consumers and, crucially, reduce the EU’s reliance on other countries for its energy needs, as well as supporting the transition to clean energy.
Other recent initiatives include the 2025 AI Continent Action Plan, which aims to make Europe a global leader in AI, and InvestAI, an initiative to mobilise €200 billion for investment in AI, including a new €20 billion fund specifically for gigafactories.3
Meanwhile, Horizon Europe 2028-2034 is a €175 billion programme to boost Europe’s productivity and competitiveness, focusing on a range of technologies like smart energy grids, clean aviation, cybersecurity and next-generation AI4.
This vast and targeted support presents significant investment potential against a backdrop of a stable, long-term policy framework.
- {https://digital-strategy.ec.europa.eu/en/policies/chips-act-2}
- {https://digital-strategy.ec.europa.eu/en/policies/cloud-and-ai-development-act}
- {https://digital-strategy.ec.europa.eu/en/news/eu-launches-investai-initiative-mobilise-eu200-billion-investment-artificial-intelligence}
- {https://research-and-innovation.ec.europa.eu/news/all-research-and-innovation-news/horizon-europe-2028-2034-twice-bigger-simpler-faster-and-more-impactful-2025-07-16_en}
Securing raw materials supply
Europe is also making efforts to secure its supply chain of critical raw materials, many of which are integral to key technologies across the digital, automotive, defence and aerospace sectors.
Europe relies heavily on imports, and geopolitical tensions have highlighted the risk to supply chains. The 2024 Critical Raw Materials Act aims to grow EU capacity and reduce dependency, while also improving sustainability.
This means both creating new partnerships with other countries, and a shift towards localisation of raw materials, for instance lithium mining. Lithium is a crucial element in battery technology, for example for electric vehicles or renewable energy, and demand is expected to reach 58,000 tonnes per year in 2030.5
Finland is now home to a lithium mine and refinery6 while lithium projects are underway in Germany and France.7
- {https://webgate.ec.europa.eu/circabc-ewpp/d/d/workspace/SpacesStore/760da134-e3de-4421-a3d4-751cbea62e9a/download}
- {https://www.rapporteur.com/news/in-finland-europes-first-complete-lithium-mine-begins-operation/}
- {https://www.cleanenergywire.org/news/geothermal-lithium-extraction-plant-southern-germany-starts-taking-shape}
Long-term investment opportunities ramp up
National government and EU-wide policy is ultimately creating a stable, long-term investment framework.
The region’s drive for strategic autonomy is presenting opportunities across a wide and diverse range of sectors, from AI and cloud computing to energy and utility companies benefiting from new technologies to companies involved in designing, constructing and maintaining the necessary infrastructure.
Fundamentally Europe is undergoing a structural transformation, positioning itself to better withstand shocks, generate sustained economic growth and become more competitive on a global scale. Technology is at the heart of its sovereignty aims, which is creating many potential long-term investment opportunities.
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