What is the Cloud and AI Development Act?

The European Union is drastically shifting its approach to digital infrastructure. To reduce strategic dependencies on non-EU cloud providers, the European Commission has proposed the Cloud and AI Development Act. Scheduled for full rollout by late 2027, this act is a core component of the EU Tech Sovereignty Package.

At the heart of the proposed act is the Cloud Sovereignty Framework. It mandates how public sector bodies must procure and use cloud and AI services based on their specific risk profiles, categorizing them into four “Assurance Levels.”

The Level 3 Trap: Why US Dependencies Become a Compliance Nightmare

For public administrations handling sensitive data, Assurance Level 3 will become the critical benchmark.

To qualify for Level 3, cloud and AI service providers must meet strict criteria:

• Data must be processed and stored exclusively within the EU.
• The provider must be owned and controlled from within the EU.
• Additional criteria regarding software supply chain transparency and personnel citizenship apply.

This is where the problem starts for most AI transcription tools.

Unlike Tucan.ai, the vast majority of our competitors do not own the core technology they sell. Under the hood, they use white-labeled APIs from US hyperscalers—most commonly Microsoft Speech Recognition or OpenAI models hosted on European servers..

Because these underlying models are controlled by a US-based entity, they might fail the Level 3 sovereignty test. By 2027, public sector organizations required to meet Level 3 standards could find themselves operating illegally if they continue to use these “wrapped” US technologies.

The Tucan.ai Advantage: 100% Sovereign, German Software

Digital sovereignty is not a marketing buzzword for Tucan.ai; it is the foundation of our architecture.

If your organization handles internal administrative data, municipal council meetings, or sensitive citizen information, you need absolute certainty that your data never touches a US-controlled server or a US-owned AI model.

How Tucan.ai guarantees compliance:

• Proprietary AI Models: We do not route your audio through Microsoft, Google, or AWS. Our speech recognition and AI summarization models are built, trained, and owned entirely by Tucan.ai.
• EU Ownership & Control: As a German company, we are fully independent of third-country interference, meeting the strict requirements of Level 3 and beyond.
• On-Premises & European Cloud: We host exclusively on highly secure, European servers or directly on your own infrastructure (On-Premises).

Conclusion: Future-Proof Your Public Administration Now

The regulatory window is closing. As the Cloud and AI Development Act moves toward implementation in 2027, public authorities must audit their software supply chains today. Tools that silently rely on Microsoft speech recognition will soon become a massive compliance liability.

Make the switch to true digital sovereignty. Choose Tucan.ai for smart, efficient, and 100% legally compliant AI meeting notes. You can book a free consultation call here.