Leading CEOs in the telecom space at this week's Mobile World Congress event were fervent in their frustration with European lawmakers over an apparent regulatory reluctance to encourage technological investment.

They might want to look away after a draft of the bloc’s proposed "Made in Europe" industry policy appears to show AI, semiconductors, and quantum have been cut from the list of "strategic" technologies mandated for European production.

The EU’s proposed Industrial Accelerator Act (IAA) is a policy effort looking to boost the bloc’s manufacturing capabilities by strengthening its supply chain of sectors deemed strategic, while in turn banging the sovereignty drum.

But after Deutsche Telekom CEO Tim Höttges expressed concerns about support from continental lawmakers for investment in cloud, AI, and GPUs earlier this week, a 96-page draft dropped on March 4 listed net-zero and nuclear fuel cycle technologies, as well as electric vehicles, as the bloc’s strategic sectors.

But Article 24.1 confirmed that the proposed list of strategic focuses “exclud[es] digital technologies, artificial intelligence, quantum technologies, and semiconductors.”

As of the end of last year, the European Union (EU) chip market was a specialized player with a roughly 9% to 12.7% share of global semiconductor production. While the EU has a strong position in specific niches like automotive chips and semiconductor manufacturing equipment (led by ASML), it lags significantly behind the United States, Taiwan, and South Korea in high-volume, leading-edge logic chip manufacturing.

The EU has traditionally lagged when it comes to chip manufacturing, accounting for just 12.7% of the global market in 2023. The European Chips Act is attempting to remedy this situation through a $48 billion investment in the hopes of doubling regional market share.

The bloc has also sought to join the list of nations hungry to invest in AI through its AI Continent Action Plan – an effort that was recently questioned by Nokia, with the network giant claiming it showed a disconnect between the ambition and the ability to deliver Europe’s dream of being a leading AI continent.

Despite prior AI-enthused saber-rattling through its all-encompassing AI Act, EU lawmakers have since gone back to the drawing board after succumbing to pressures from several unhappy tech players.

The bloc is looking to maintain its one area of AI from a production standpoint, with a review planned for the open source space to counter American’s domination of the proprietary space.

Robots & biotech out; ‘security & sovereignty’ in

Robotics and biotechnology are other areas believed to have been cut, according to reports prior to the draft’s publication, despite the bloc’s inherent successes in these spaces. Europe is home to several big names in the robotics space, like ABB in Switzerland and industrial bot-maker Kuka, while more than $11.6 billion annually of the EU’s budget goes toward the life sciences.

Stéphane Séjourné, the EU’s EVP for prosperity and industrial strategy, said provisions outlined by the IAA “will create jobs by directing taxpayers’ money to European production, decreasing our dependencies and enhancing our economic security and sovereignty.”

In addition to sidelining AI and chips, the IAA draft appears to have also shunted plans to exclude non-EU-based suppliers from government contracts and funds related to those strategic sectors.