EU Cloud Rules Put Big Tech Tenders at Risk

EU Cloud Rules Put Big Tech Tenders at Risk

Alphabet (GOOGL, Financials) and other U.S. cloud giants could face new hurdles in Europe as regulators prepare rules aimed at reducing dependence on American technology providers.

Draft documents show the European Union may set strict requirements for cloud services used in highly critical government contracts. Those rules could make it harder for Google, Amazon and Microsoft to win certain state tenders.

The plan is part of the European Commission's Cloud and AI Development Act, expected to be announced Wednesday. The broader goal is to strengthen Europe's technology sovereignty and build more local capacity in cloud and artificial intelligence.

One key part of the proposal would add non-price award criteria. That means governments may have to consider where software and hardware are developed, not just the cost of the service.

For U.S. cloud providers, the risk is clear. Even if their services remain competitive on price and performance, they could lose ground in sensitive public-sector deals if European ownership and local technology become more important in contract decisions.