Ireland took over the rotating chair of Council, which houses member states’ governments, and with it digital policymaking at a moment when the bloc is debating a new Tech Sovereignty package that favors European suppliers and raises barriers to foreign imports. The proposed European regulations have set off alarm bells in Washington.
Few countries have more at stake. The US is Ireland’s biggest foreign investor, accounting for €800 billion, according to the Irish Central Statistics Office. The country is home to the European headquarters of many of America’s biggest companies, from tech stalwarts Alphabet and Apple to pharma giants Eli Lilly and Pfizer.
Ireland aims to avoid taking sides in digital disputes, determined to preserve a workable transatlantic tech framework. Between July and December, the country hopes to forge a European consensus negotiating position on the Chips Act 2.0, steer the contentious Digital Omnibus, and manage a Cloud and AI Development Act whose sovereignty clauses worry major American cloud providers operating in Europe.
The Chips Act 2.0 builds on its 2023 predecessor, which turned out to be wide of the mark in addressing Europe’s semiconductor vulnerabilities. Industry Associations and think tanks such as Bruegel criticized Chips Act 1.0 for its lack of focus and feasibility.
Instead of simply aiming to attract manufacturing by state subsidy, Chips Act 2.0 is intended to stimulate demand. The Act includes “Grand Challenges,” which are large-scale, mission driven industrial programs (rather than individual research projects) that are designed to bridge the EU’s persistent research-to-production gap.
The intention is to develop, integrate, and industrialize semiconductor technologies that are critical for Europe. Chips Act 2.0 has received more positive reception than Chips Act 1.0 did. The European Semiconductor Industry Association calls it “an important next step.” While “the Chips Act did not address all vulnerabilities,” the Global Electronics Association writes, “Chips Act 2.0 could move Europe closer to reclaiming a measure of ownership of its most critical systems.”
The Cloud and AI Development Act (CADA), uncontroversially, aims to triple EU data center capacity within five to seven years by fast-tracking permitting processes and easing access to energy and financing. Yet the proposal also introduces a four-tier framework to assess and certify cloud providers handling sensitive public sector workloads, while ensuring that data remains secure and free from extraterritorial third-country laws. It requires public sector bodies and essential entities to prioritize European-based cloud and AI services.
Certain European governments have already asked for clarifications on how the proposed sovereignty framework interacts with existing artificial intelligence, data, and cybersecurity legislation. CADA would hand “recognition” of cloud and AI providers to the company’s European headquarters. Ireland, as European home to most American cloud providers, would play a central role in how sovereignty assessments would work in practice. Given the dossier’s sensitivity, Ireland’s goal is not to force a sprint, only to steer a constructive discussion.
Then there is the Digital Omnibus, a package that aims to simplify compliance with a wide variety of digital rules, from privacy to data sharing to cybersecurity. Ireland inherits the file, along with the political tensions that surround it. European Parliament rapporteur Aura Salla of Finland, who previously worked with Meta, has been blunt in her view that the US can no longer be considered a reliable partner. That is not an encouraging starting point for a dossier impacting how American firms operate in Europe.
The backdrop to these digital dossiers is an unstable transatlantic relationship. Although Europe swallowed an increase in US tariffs in the Turnberry trade deal, which entered into force on July 1, President Trump has threatened new 100% tariffs on countries levying digital services taxes. Hundreds of millions of euros in European fines on US tech companies add to his anger.
Brussels is determined to stand firm. The European Commission recently moved to designate two leading American cloud producers, Amazon Web Services and Microsoft Azure, as gatekeepers under the Digital Markets Act. A final decision is expected within twelve months, but the direction of travel is clear.
The Commission has pushed back on the digital tax tariff threat, asserting the EU’s sovereign right to regulate. Ireland will have to hold that line while remaining the European country most exposed if Washington retaliates.
There is also ongoing friction over content moderation and online speech. The Trump administration has decried the Digital Services Act as “censorship,” insisting it unfairly targets US platforms. Ireland must navigate that debate carefully rather than let it become another front in an already crowded agenda.
There’s also pressure from Brussels. European parliamentarians Andreas Schwab and Pablo Arias Echeverria sent a letter to the European Commission accusing Dublin of “systemic failure to fully apply” EU privacy laws. A group of 60 academics penned another letter calling on Ireland to recuse itself from digital dossiers, because of its allegedly “questionable track record regarding the protection of EU digital rights and the EU’s fiscal base.” Politico reported on both letters.
The Irish government has pushed back, insisting that it will act as an honest broker — neutral between member states, not leaning on its US ties to shape outcomes. That is understandable; EU presidencies govern by consensus.
But honest brokering and passivity are not the same. Ireland’s relationships with US tech gives it a special responsibility to help navigate turbulent waters.
Lucinda Creighton is a non-resident Senior Fellow with the Digital Innovation Initiative at the Center for European Policy Analysis. She is also the Founder and CEO of Vulcan Consulting. Lucinda is a Barrister, qualified New York attorney, former Irish Minister for European Affairs, Deputy Foreign Minister, and Member of the Irish Parliament.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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