EU Approves €1.2B in State Aid for Cloud and Edge Technology Initiative

EU - Thierry Breton
“With this IPCEI, Europe will reinforce its innovation leadership in next generation data processing services,” said Commissioner Thierry Breton.

The European Commission has approved a massive €1.2 billion State assistance program for an Important Project of Common European Interest (IPCEI) in cloud and edge computing technologies, marking a significant milestone in the field. With the potential to drastically alter the way cloud and edge computing technologies are developed and implemented across the continent, this decision represents a major advancement in Europe’s digital and technical environment.

France, Germany, Hungary, Italy, the Netherlands, Poland, and Spain are the seven European Union member states that are partners in the project, which is called IPCEI Next Generation Cloud Infrastructure and Services (IPCEI CIS). A further €1.4 billion in private investments are anticipated to be stimulated by the €1.2 billion in public money allocated to this pan-European endeavor. The initiative’s goal is to assist 19 businesses, including small and medium-sized organizations (SMEs), in carrying out 19 very creative initiatives that will help the research, development, and initial industrial deployment of cutting-edge cloud and edge computing technologies.

IPCEI CIS will be concentrating on building the multi-provider cloud to edge continuum – the first accessible and interoperable data processing ecosystem in Europe. It aims to provide the software, hardware, and data sharing mechanisms necessary for distributed data processing technologies and associated services that are reliable, federated, and energy-efficient. Alongside Europe’s objectives for the digital and green transition, new possibilities for companies and individuals are anticipated as a result of the innovation supported by IPCEI CIS.

The creation of open-source software to provide real-time, low-latency services by allocating computer resources near to its users is a crucial component of IPCEI CIS. With this strategy, there won’t be as much need to send massive volumes of data to centralized cloud servers. The numerous initiatives seek to facilitate the digital and green transition in a variety of sectors, including energy, health, and marine. They cover the whole cloud edge continuum, from fundamental software layers to sector-specific applications.

“The IPCEI approved today is crucial to deliver breakthrough innovation on Cloud and Edge technologies that fulfil European requirements for interoperability, data privacy, sustainability and cybersecurity,” said Commissioner Thierry Breton. “It will also provide the technologies and solutions to reach our Digital Decade Strategy 2030 objectives: a 75% of cloud uptake by EU enterprises and more than 10.000 edge nodes across Europe. With this IPCEI, Europe will reinforce its innovation leadership in next generation data processing services.”

Project Timeframes Ranging from 2023 to 2031

The project timeframes, which vary depending on the firm and project, range from 2023 to 2031. By the end of 2027, a noteworthy result – an open-source reference infrastructure – is anticipated. During its stages, this project is expected to generate at least 1,000 highly qualified direct and indirect employment, with many more expected during the commercialization phase.

According to the European Commission’s evaluation conducted in accordance with EU State assistance regulations, namely the 2021 IPCEI Communication, IPCEI CIS satisfies all requirements and is compliant with State aid regulations. The certification by the Commission emphasizes how IPCEI CIS directly supports a number of EU goals for a digital, more environmentally friendly, resilient, secure, and independent economy. The 19 projects that make up the IPCEI are very ambitious, with the goal of creating ground-breaking technologies that will outperform the state-of-the-art in data processing.

In addition, the European Commission acknowledged that undertaking such an endeavor carries a great deal of financial and technical risk, and that public assistance is thus required to encourage businesses to pursue their own initiatives. Assistance given to specific businesses is closely monitored to make sure it is necessary, appropriate, and doesn’t significantly impede competition. Successful initiatives that provide additional net income will also reimburse the corresponding Member State for a part of the funding they received.

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‘Major Beneficial Impact across Europe’

It is anticipated that this IPCEI will have a major beneficial knock-on impact across Europe, helping rivals, end users, and non-participating businesses. Participating firms would widely disseminate the information and outcomes of the initiative to the larger European industry and scientific community. This involves licensing open-source software, allowing access to edge node capacity, bringing technology to new industries, conducting focused training, and offering fair-term licenses for intellectual property.

With the IPCEI, 19 businesses are working directly together to create an interoperable, multi-provider cloud edge continuum that is compatible across the European Union. Over 90 indirect partners, including startups, businesses of all sizes, and research institutions from five more EU members, are a part of the IPCEI CIS’s larger ecosystem. Public funding for initiatives carried out by research organizations is exempt from Commission approval under certain circumstances and does not count as assistance.

The European Commission has also released a Code of Good Practices to aid in the transparent, inclusive, and effective design of IPCEIs in addition to this landmark ruling. The Commission’s dedication to pinpointing key areas for next IPCEIs and improving the efficiency of the IPCEI procedure is reflected in this Code and the Joint European Forum for Important Projects of Common European Interests (JEF-IPCEI). The JEF-IP

“This Important Project of Common European Interest is the first one in the cloud and edge computing domain,” said Commissioner Didier Reynders, in charge of competition policy. “The IPCEI will provide for highly ambitious research, necessary to enable the uptake of innovative data processing applications and services for European businesses, public administrations, and citizens. Today’s decision makes sure that public support is well targeted and sufficient to enable the project to pursue its ambitious goals, while safeguarding the level playing field and ensuring that strong positive spill-overs can be generated throughout the Union.”