The EU has approved $1.3 billion (EUR1.2 billion) in funding for a European cloud computing project to compete with US companies.

The companies involved in the project will create open-source software designed to enable real-time and low-latency services using computing resources located near the user. This approach is intended to reduce the need to send large amounts of data to centralized cloud servers. The project is expected to initially create about 1,000 jobs for data scientists and AI specialists and later add around 5,000 more jobs.

Marty Puranik, the CEO of Atlantic.Net, a cloud hosting provider that plans to expand into Europe soon, said in an interview that the EU project could have a “significant” impact on the market.

“I think it sends a strong message that the EU is interested in native companies providing their infrastructure rather than foreign companies having a footprint in the EU,” he said.  “Internal EU companies are most likely to be more regulatory friendly in complying with EU laws for privacy and security, which tend to be more strict than outside the EU. Plus, developers who live there will develop apps that are EU-friendly from the start, rather than having commissions to tell popular apps to allow more competition retroactively.”

The European cloud technology initiative involves 19 firms, among them notable companies like France’s Atos and Orange, Germany’s Deutsche Telekom and SAP, as well as Telecom Italia and Spain’s Telefonica. The top three dominant companies in cloud computing are Amazon, Microsoft, and Google.

The companies in this project are focusing on four key areas. The first is “Cloud Edge Continuum Infrastructure,” where they’re creating software to update existing technology to work with new applications. This area includes making open-source software that helps cloud service edge nodes from various providers work together.