The European Union invests significant amounts of public money in digital research and innovation and has made steady progress in digital transformation over the decades. At the same time, people, businesses, and institutions in Europe remain heavily dependent on digital services and products provided and controlled by non-EU corporations. Rising geopolitical tensions and shifting alliances have made the precarious position this creates for Europe increasingly clear. Digital sovereignty is high on the EU’s agenda. This report analyzes the European Union's approach to funding digital technology research and innovation, focusing on the allocation of resources under the Digital Europe and Horizon Europe programs. It situates this analysis within the broader landscape of EU technology policy, its reliance on digital innovation for economic competitiveness, and the ambition to maintain – or perhaps rather, achieve – technological sovereignty. Based on our analysis, we draw the following conclusions and recommendations.