The European Union’s “Made in Europe” industrial plan was supposed to be a statement of strategic intent. Instead, it has become a case study in how hard it is to make one.

Reuters reported this week that the plan has been delayed after internal disagreements over scope — specifically, how strict the local-content requirements should be. The surface story is a Brussels negotiation stalling. The actual story is a high-stakes fight over whether American cloud hyperscalers or European providers will dominate the infrastructure layer of Europe’s AI future.

What the Plan Is

The “Made in Europe” initiative is part of the EU’s broader industrial policy push to build strategic capacity in critical technology sectors — think of it as the European analog to the US CHIPS Act, but applied more broadly to semiconductors, clean energy hardware, and increasingly, digital infrastructure including AI compute and data centers.

The AI component is particularly significant. Public-sector AI deployments — government services, national research institutions, healthcare, financial regulation — would under the stricter proposals be required to procure from EU-qualified vendors. That redirects billions in annual spend that currently flows largely to Amazon Web Services, Microsoft Azure, and Google Cloud.

Why It’s Stuck

The stall is over local-content thresholds. Stricter thresholds mean a higher percentage of value-added must come from EU-based companies to qualify — which effectively limits eligibility to European cloud providers. Looser thresholds preserve the status quo, where US hyperscalers can qualify by virtue of their European data center footprints, even if the underlying infrastructure, software stack, and corporate headquarters are American.

This is not a technical disagreement. It is a political one. Member states with closer commercial ties to US cloud providers are pushing for looser thresholds. Those more committed to building domestic tech champions — France has been notably vocal on industrial sovereignty — want tighter standards.

US tech lobby groups have been active in Brussels on this issue. Their engagement is itself a signal of how much the outcome matters to hyperscaler revenue projections.

Who Wins and Who Loses

If strict local-content rules prevail, the beneficiaries are European cloud providers like OVHcloud, Hetzner, and Deutsche Telekom’s T-Systems, along with the broader Gaia-X initiative and sovereign cloud startups that have been positioning for exactly this moment. For these companies, a procurement preference for EU-qualified vendors would be transformative.

For AWS, Azure, and Google Cloud, strict rules would mean either building out genuinely European supply chains — difficult, expensive, and time-consuming — or accepting exclusion from a significant segment of EU public procurement. Neither is appealing.

The Bigger Pattern

Europe is not alone in treating AI infrastructure as a strategic asset. India has enacted data localization requirements. China operates an almost entirely closed AI stack. The United States passed the CHIPS Act to reshore semiconductor manufacturing. The global trend is unmistakable: governments are treating compute and cloud as strategic infrastructure, on par with energy grids and telecommunications networks.

Europe is moving later than some, but the EU AI Act has embedded sovereign AI concerns explicitly into governance frameworks — particularly around high-risk AI systems in regulated industries. The “Made in Europe” industrial policy is the procurement and infrastructure companion to that regulatory architecture.

What to Watch

A revised plan is expected within a week. The key signals: how strict are the final local-content thresholds, and are AI and cloud workloads explicitly included or carved out from the requirements?

If AI infrastructure is explicitly included with meaningful thresholds, this is a significant realignment of European cloud spend. If it’s carved out — or thresholds are set low enough that hyperscalers qualify easily — the delay will have produced mostly a statement of aspiration, not policy.

Either way, the fight is real. The stakes are infrastructure-level. And the outcome will be studied by every government currently trying to answer the same question: who builds the AI your country runs on?

Researched by Searcher → Analyzed by Analyst → Written by Writer Agent (Sonnet 4.6). Full pipeline log: subagentic-20260223-1046