EU Cloud & AI Development Act: What It Means for Europe

Samantha: Welcome to The State of Tech, The European Edition, Saturday July four, 2026. I'm Samantha Lawrence.

Bob: And I'm Bob Russell. Today: India opens its first major chip packaging plant, Palantir pushes deeper into US national security with AI, a European Commission proposal to bankroll cloud and AI, a South Korean robotics firm raising pre-IPO money for warehouse automation, and to close out, two things you can actually use today: the free image editor Krita, and the privacy-friendly reading app Readeck. Let's start with India.

India opens its first major semiconductor packaging plant in Gujarat, chasing chip independence.

Samantha: India has just switched on its first serious semiconductor packaging facility, in Sanand in the state of Gujarat. Prime Minister Narendra Modi cut the ribbon on a plant worth around seven thousand six hundred crore rupees, roughly eight hundred and seventy million dollars. It's a joint venture between India's CG Power, Japan's Renesas, and Thailand's Stars Microelectronics. And the ambition is not small: they're targeting four point seven billion chip units a year within five years.

Bob: And crucially, this is packaging, not the wafer fabs everyone talks about. Packaging is the step where the tiny chips get assembled into the components that go into your car, your washing machine, your phone tower. It's less glamorous than a leading-edge fab, but it's a real bottleneck in the global supply chain, and one where India can genuinely compete without matching Taiwan on cutting-edge lithography.

Samantha: The end markets are telling: automotive, industrial electronics, consumer gadgets, and telecom. Which is basically everywhere Europe buys chips too. India is positioning itself as an alternative node in a supply chain that today runs almost entirely through East Asia. And the fact that Japanese and Thai partners are in this deal shows a wider Asian rebalancing, not just an Indian solo effort.

Bob: For Europe the interesting question is whether this eases the pressure that's been building since the pandemic. European carmakers still remember 2021 and 2022, when missing chips shut down production lines in Germany and France for weeks. A second serious packaging hub outside Taiwan and China gives European buyers a bit more room to breathe, and a bit more leverage in negotiations.

Samantha: It also lands right as Brussels is spending under its own Chips Act, trying to double European chip market share by 2030. India's plant is a reminder that everyone is running the same race. The bottom line: this doesn't solve Europe's dependency overnight, but it adds a real alternative to a supply chain that has been dangerously concentrated. Watch whether German and French automakers start signing supply agreements with Sanand over the next year, that's the real signal.

Palantir pushes deeper into US national security, putting AI inside the military kill chain.

Bob: Palantir Technologies is quietly, or maybe not so quietly, deepening its role at the heart of US national security. Two systems in particular: something called ImmigrationOS, used by US Immigration and Customs Enforcement to analyse surveillance data and identify people for deportation, and the Maven Smart System, which is now feeding AI into what the military calls the kill chain, the sequence of steps from spotting a target to striking it.

Samantha: The phrase kill chain is worth pausing on, because that's the part that changes the debate. Palantir isn't just doing back-office analytics here. Its software is helping identify and prioritise targets for military action. The company frames it as freeing human operators to focus on higher-level strategy. Critics frame it as automating parts of a decision that has, until now, sat firmly with humans.

Bob: And this isn't theoretical anymore. Project Maven is the Pentagon's flagship AI programme, and it's operational. The direction of travel is clear: more AI, more automation, in decisions with life-or-death consequences. It raises a question that European defence ministries have been dancing around for years: at what point does a human sign-off on a target become a rubber stamp on an algorithm's recommendation?

Samantha: For Europe this matters on two fronts. First, NATO interoperability. If American forces are running AI-assisted targeting and European allies are not, joint operations get complicated fast. Second, the EU AI Act specifically carves out military use, meaning European militaries have more room to adopt similar tools than civilian sectors do. Expect Paris, Berlin and London to be watching Maven very closely, and expect civil society groups to push back hard on the ethics.

Bob: There's also the immigration angle, which is a separate but related concern. Using AI to identify people for deportation is a very different use case from military targeting, but it uses similar surveillance-data techniques. The same infrastructure, applied to different populations. That's the pattern to watch: dual-use AI systems moving between security domains with limited public scrutiny.

Samantha: Quick interruption. If you listen to The State of Tech regularly, hit that like button and subscribe, that way you'll never miss an episode. Okay, moving on.

Brussels proposes a new Cloud and AI Development Act to bankroll Europe's digital future.

Bob: The European Commission has put forward a proposal for a new Cloud and AI Development Act, published on 3 June. It's aimed squarely at building up Europe's cloud and AI ecosystem, from investment to infrastructure. Three pillars: funding research and innovation in next-generation cloud and AI, launching so-called grand challenges to push R&D, and strengthening digital infrastructure across member states.

Samantha: The framing is important. This is not another regulatory act like the AI Act, which was about setting rules. This one is about spending money and building capacity. Brussels has been criticised, fairly or not, for regulating a technology sector it doesn't have. The message from the Commission now is: we're going to try to grow one.

Bob: The scope covers frontier AI, industrial AI, and physical AI, which is a signal that Europe wants to compete not just on chatbots but on robotics, factory automation, and the AI that runs actual machines. That plays to European industrial strengths in manufacturing, automotive and pharma. If this passes, it complements the AI Act by giving European companies more resources to actually build the technology they're being asked to regulate.

Samantha: The catch, of course, is the numbers. Compared with the hundreds of billions the US private sector is pouring into AI infrastructure, and China's state-backed spending, European funding packages tend to look modest. Industry groups have argued repeatedly that far larger sums would be needed to close the gap. The proposal is a start; whether it becomes a serious industrial policy depends on how member states actually fund it.

Bob: The bottom line: this is Brussels trying to shift the conversation from what Europe forbids to what Europe builds. Researchers, cloud providers and AI startups in the EU should be watching the legislative timeline closely, because grants and infrastructure access could reshape who wins the next round of European AI.

South Korea's FASSTO Robotics raises pre-IPO money for AI-driven warehouse robots.

Samantha: Onto robotics. FASSTO Robotics, a South Korean company working on what it calls physical AI, has just closed the first tranche of its pre-IPO funding round. The amount is undisclosed, but the lead investor is a robotics-focused fund set up by Ion Asset Management, Cornerstone Investment Partners, and NH Hedge Asset Management. The company is aiming for a public listing in the second half of the year.

Bob: What FASSTO actually does is worth translating out of jargon. They build warehouses that run themselves. Autonomous mobile robots move goods around, and an AI-based system decides what those robots should do next, in what order, and where. It's the software brain plus the hardware muscle, sold as a single package to logistics operators.

Samantha: The proceeds are earmarked for improving that AI brain, developing tighter control systems for the robots on the warehouse floor, and expanding partnerships ahead of the listing. This sits inside a much broader wave: physical AI, meaning AI embodied in machines that move through the real world, is one of the hottest investment themes of 2026.

Bob: For Europe this trend is directly relevant. European logistics, from Rotterdam ports to Amazon and Zalando warehouses across Germany and Poland, is in the middle of an automation push. Labour shortages, rising wages, and e-commerce volumes are all pointing the same way. Korean and Chinese robotics firms are becoming credible suppliers to European operators, alongside German and Swiss incumbents like Kion and Swisslog.

Samantha: And the timing lines up with that European Cloud and AI Development Act we just discussed, which explicitly names physical AI as a priority. If Europe wants a robotics champion, it will be competing with well-funded Asian rivals like FASSTO. Watch for European logistics groups to either partner with these Asian firms or push harder on home-grown alternatives.

Krita is the free open-source painting app that rivals expensive digital art software.

Bob: To close out, two things you can actually use today, and neither of them costs anything. First up: Krita. It's a free, open-source digital painting and illustration app, and it's genuinely one of the best-kept secrets in creative software. If you or your kids have ever wanted to try digital drawing without paying a subscription to Adobe or Clip Studio, this is where to start.

Samantha: Krita is built specifically for artists rather than photographers. It has proper brush engines, texture support, animation tools, and a comic panel workflow. Users often compare it favourably with Photoshop for painting tasks specifically, though it's not trying to be a general-purpose photo editor. It runs on Windows, macOS, and Linux, and there's a version for tablet-style hardware too.

Bob: The reason to try it today: it's completely free, no account required, no data collection, and no upsell to a cloud service. You download it from krita dot org, install it, and you're painting within minutes. Illustrators, concept artists, and hobbyists have used it for years, and it's been used on published comics and animations. Reviewers regularly praise how polished it feels for a community-driven project.

Samantha: For European users specifically, this matters because so much creative software is now subscription-only and US-hosted. Krita is developed by a Dutch-based non-profit foundation, and everything runs locally on your machine. Nothing goes to a cloud. If you've been curious about digital art but put off by monthly fees, spend an evening with Krita this weekend.

Bob: One practical note: if you have a drawing tablet lying in a drawer, this is the app that will make you actually use it. Wacom, Huion, XP-Pen, all well supported. And if you don't have a tablet, a mouse works for basic exploration.

Readeck is the privacy-friendly read-it-later app that saves articles for offline reading.

Samantha: And the second one: Readeck. It's a self-hosted, open-source read-it-later app, in the spirit of the older Pocket or Instapaper tools. You save articles from the web, and Readeck strips out the clutter, the ads, the pop-ups, the newsletter prompts, and gives you a clean readable version you can go through later, including offline on your phone or tablet.

Bob: The reason it's worth trying this weekend is that Mozilla's Pocket service shut down earlier this year, leaving a lot of people looking for alternatives. Readeck fills that gap and adds proper e-book export, so you can send a batch of long reads to your Kindle or e-reader in one go. It's genuinely useful for anyone who saves articles faster than they read them.

Samantha: The self-hosted part is the trade-off. If you're technical, you can run it on your own small server for full privacy. If you're not, there are hosted options run by third parties across Europe, or you can ask a technically-inclined friend to set one up. Either way, your reading list stays out of the hands of advertisers.

Bob: It works via a browser extension for Firefox and Chrome, and there's a mobile web version that behaves like an app. Users praise it for being fast, clean, and free of the algorithmic recommendations that Pocket started sprinkling in during its final years. Just your saved articles, nothing else. Try it at readeck dot org.

Samantha: Today we covered: India's first major chip packaging plant opening in Gujarat, Palantir deepening AI's role in US national security and military targeting, Brussels proposing a new Cloud and AI Development Act to fund European infrastructure, South Korea's FASSTO Robotics raising pre-IPO money for warehouse automation, and two things to try yourself: Krita, the free digital painting app, and Readeck, the privacy-friendly read-it-later tool.

Bob: Want to know more or react? Visit stateoftech.eu or email us at info@doorzetters.net.

Bob: State of Tech, the tech world in 15 minutes.