a flood of chips in the market in the years to come. By waiting to build out data centres first and securing chips later, the EU could reduce the cost tenfold. A strategic diversification of chip providers is essential to grant the public sector the agency needed to prevent vendor capture and maintain long-term technological autonomy. One source of agency in the AI value chain is silicon diversity , which strategically prevents capture and vendor-lock in by one provider(Boulton 2023). European companies have shown some appetite to develop alterna­tives, for instance the deployment of Groq chips in Equinix data centres in Helsinki, and Cerebras chips by European AI companies like Aleph Alpha and Cerebras(Dahlstroem& Stephens 2025). Compute demand and supply must be pooled on a cen ­tralised platform to prevent market fragmentation and capture by the existing players. 35 European providers are currently fragmented, with many competing for little demand. This makes them vulnerable to being drawn into the pull of hyperscaler demand and then becoming commodified pro­viders as part of private aggregators such as Nvidia Lepton DGX. Addressing the concentration of demand requires explicitly coordinating demand between users, competitive unbundling within cloud markets and controlled integration through interoperability. Conclusion This report highlights the market dynamics at play ahead of the EU Cloud and AI Development Act and the Europe­an efforts to stay in the AI race. Without strategic perspec­tive, the default direction of initiatives like tripling the data centre capacity in the EU will entrench the incum­bent major market players in a captured ecosystem. Craft­ing an alternative requires a decisive, strategic approach that charts a conscious path in the thicket of various pri­vate interests. Although we have set aside the question of whether the AI buildout is justified in the first place, there is growing, tan­gible evidence that its current market trajectory may exac­erbate inequality, constrain innovation, negatively impact the environment and weaken accountability in society. These are pressing matters. While the political choices are for elected politicians to make, this report highlights sever­al ways in which policy decisions risk being influenced and constrained by the material realities of the AI buildout. We hope that acknowledging these constraints provides a path for a fact-based debate on the kinds of societies Europe wants to build with AI. 35  For proposals in this vein, see Schulze& Van Veen 2025b. Policy implications 27