Most major hyperscalers and cloud service providers now offer the option to keep data local within a home country. But that may not be enough to address the concerns of EU enterprises. Increasingly, many fear that even though cloud data is hosted within a country’s borders, it may not be as protected as the laws of the land require. This is driving interest in sovereign clouds.
Why now? Concerns about meeting local data privacy and protection regulations have always been strong in the EU. In the past, the service offerings from major cloud service providers that assured compliance with local regulations and gave enterprises control over their data were enough to satisfy most organizations. In fact, all three of the major cloud providers launched sovereign cloud efforts in 2023.
But the comfort level with U.S. run providers handling such tasks has changed. Some attribute the change to the increased political tension and animosity between the U.S. and European countries. Regardless of the reason, a Gartner survey found that 61 percent of European CIOs and tech leaders want to increase their use of local cloud providers. More than half said that geopolitics will “prevent them from leaning further on US-based hyperscalers.”
Additionally, an Accenture report indicates that 62% of European organizations are actively seeking sovereign solutions (including sovereign cloud and sovereign AI) due to geopolitical uncertainty and data control concerns.
The bottom line is that EU policymakers and CIOs often summarize the risk as, “If data is held by a U.S. company, U.S. law may still reach it, even if stored in Europe.”
See also: Oracle Launches EU-Only Sovereign Public Cloud
Why EU Countries are Prioritizing Sovereign Cloud
Multiple strategic, legal, and economic factors drive EU interest in sovereign cloud. They include:
1. Reducing Dependence on Non-EU Providers
A persistent concern is that the EU relies heavily on U.S. hyperscalers (Amazon, Microsoft, Google), which historically have accounted for the majority of cloud infrastructure in Europe. According to recent estimates, three U.S. cloud providers accounted for 65–70% of the EU cloud market, while EU-headquartered providers held a relatively small share.
2. Data Sovereignty and Legal Jurisdiction
Beyond physical data residency, real sovereignty means data, encryption keys, metadata, operations, and access controls are governed under EU law and oversight. This mitigates legal exposure in foreign jurisdictions (e.g., U.S. laws such as the CLOUD Act).
3. Regulatory Compliance (GDPR, DORA, AI Act, etc.)
EU regulations impose strict requirements on data protection, processing, and cross-border flows. Sovereign cloud infrastructure can be engineered to embed these regulatory requirements by design, reducing compliance risk and audit overhead.
4. Geopolitical and Strategic Autonomy
Sovereign cloud aligns with broader EU goals of digital sovereignty and strategic autonomy, ensuring that essential infrastructure (cloud, data, AI) is not subject to geopolitical risk or foreign control. National security, critical infrastructure resilience, and economic competitiveness are all factors here.
5. Economic and Innovation Incentives
Stronger sovereign cloud and sovereign AI ecosystems could unlock significant economic value, boost European innovation in cloud-native technologies and data services, and keep more of the value chain within the EU.
A Final Word
EU countries view sovereign cloud as essential to digital sovereignty, legal compliance, risk management, and strategic autonomy.
Recent data from Gartner and Accenture show that the majority of European CIOs and organizations are actively planning or seeking sovereign cloud-aligned strategies, with more than 60% indicating they are interested in increased local cloud reliance or sovereign solutions as part of their roadmap.
