EU strips AI, chips and quantum from industrial plan aimed at countering China

The European Union has significantly scaled back its flagship industrial policy aimed at reducing economic dependence on China. A leaked draft of the Industrial Accelerator Act (IAA), set for formal unveiling, reveals that five critical technology sectors—artificial intelligence, semiconductors, quantum computing, biotechnology, and robotics—have been stripped from the legislation. These sectors were originally designated as 'strategic technologies' that would need to be 'made in Europe' to qualify for billions in government contracts and state aid, a core mechanism for the bloc's 'de-risking' strategy. While China is directly named only twice in the 93-page document, the act is widely seen as a central pillar of Brussels' effort to counter Chinese technological dominance and secure supply chains.

The removal of these high-tech sectors represents a major dilution of the EU's industrial ambitions. The IAA's remaining focus will be on mandating local content rules for sectors like electric vehicles and solar panels in public procurement. Furthermore, plans to exclude non-EU producers from funding have been delayed by six months, with the draft suggesting countries aligning with EU economic security policies could eventually be included. This scaling back suggests significant political and practical hurdles in establishing strict 'Europe-first' production rules for the most complex and globally integrated technologies, potentially leaving the bloc more reliant on external suppliers in these foundational areas.