WIREDGOV

Geopolitical tension and fragile supply chains have made sovereignty a priority on both sides of the Channel. But the EU’s Technological Sovereignty Package, and its Cloud and AI Development Act (CADA) in particular, risks mistaking a company’s nationality for its trustworthiness. techUK’s new report, built on original economic modelling, sets out what that approach could cost the UK, and why it would leave Europe less secure and less competitive. 

The report argues that sovereignty and openness are not opposites. The UK and EU are not dependent on each other in ways that create risk. They are interdependent, and both are stronger when they build sovereign capabilities together. 

The report at a glance:  

• The UK exported £412.8bn of digitally delivered services in 2025, an estimated 36% of it to the EU. 
• Under CADA’s four-tier sovereignty framework, the highest tiers require providers to be owned and controlled from the EU. If the UK is excluded, techUK’s modelling estimates a loss to the UK economy of between £19.55bn and £22.34bn over five years. 
• These figures are likely an underestimate, as they exclude the compliance costs UK firms would face to qualify even at CADA’s lower tiers.
• The EU should designate the UK as a trusted third-country provider, and move from nationality-based criteria to technical security assurances. 

Sovereignty cannot be built alone. Technology value chains, from semiconductors to AI, are too complex and dispersed for any single country or bloc to control. Europe is still dependent on foreign countries for much of its digital infrastructure. The report argues that reducing those dependencies is legitimate and urgent, but that doing so through restrictions on trusted partners will not achieve it.