Updated European spending on sovereign cloud infrastructure services is forecast to more than triple from 2025 to 2027 as geopolitical tension drives investment in homegrown services, according to Gartner.
Worldwide sovereign cloud spending is forecast to hit $80 billion in 2026, up 35.6 percent from 2025. The Middle East and Africa (89 percent growth), Mature Asia/Pacific (87 percent growth), and Europe (83 percent growth) are projected to lead, while the US (29 percent growth) and China (26 percent growth) are growing at a more modest rate.
Europe – defined as geographic Western Europe including the UK – faces the most dramatic change, growing from a much higher base than other regions: $6.9 billion in 2025 compared to $851 million for Mature Asia/Pacific.
European concerns over reliance on the US hyperscalers stem from the US CLOUD Act of 2018, which allows American authorities to compel US-based tech companies to provide requested data, regardless of where that data is stored globally. Trade and geopolitical tensions between Europe and the US since President Trump return to power intensified these worries, with customers fearing the unpredictable US president could order hyperscalers to halt services to specific customers.
Karim Khan, the International Criminal Court (ICC) chief prosecutor, was among those sanctioned by the US over efforts to prosecute Israeli officials, including Israeli Prime Minister Benjamin Netanyahu, following an investigation of war crimes and crimes against humanity.
Khan later had access to Microsoft services temporarily cut. A spokesperson for Microsoft said it had not cut services to the ICC as a whole – yet onlookers worried the two issues were linked. The court later decided to adopt OpenDesk, an open source office and collaboration suite delivered by the German Centre for Digital Sovereignty (ZenDiS).
Speaking to The Register, Rene Buest, Gartner senior director analyst, agreed geopolitics was a factor in European sovereign cloud decisions since January last year.
“There is a lot of uncertainty being created, and this uncertainty is not good for an organization, because they don’t know how to plan. This geopolitical situation and turmoil have an indirect impact on the digital infrastructure strategies, because decision makers – not just CIOs, but the entire C-level – are asking whether we can still rely on digital infrastructure from US-based service providers. Nobody really knows, and they have to manage that uncertainty and get back more certainty.”
A broader issue of strategic or economic sovereignty was influencing investment decisions to make local and regional cloud providers more competitive.
“The only way of doing so is to spend on those providers,” Buest said.
Schwarz Gruppe, owner of supermarket giant Lidl, has invested €11 billion in STACKIT, its regional cloud provider, while French provider OVHcloud has made similar investments. However, the level of investment and total capacity are still dwarfed by those of US providers.
Late last year, Catherine Jestin, executive vice president of digital at Airbus, told The Register that partnerships between US and European companies – Google with Thales in France, Google with T-Systems in Germany, and Microsoft with Orange and Capgemini in France – are an opportunity to build skills in Europe to promote further investment and capacity.
“That’s a little bit like what Airbus did after the Second World War. We learned about aeronautics by working under license of US products. And then, thanks to that, we were able to develop our own skills and industry around it.”
She said Airbus was aware of the risk of business interruption that comes with being reliant on US providers – a risk that was very low on likelihood, but very high in terms of business impact. Such thinking was now driving market engagement.
“The questions that I have is there any existing European infrastructure that would be that capable to deliver that service. That’s why we are launching this request for proposal to say, ‘OK, this is what we want to put in a sovereign cloud tomorrow, tell me, if you can, what part of it you can manage,'” she said.
Buest said European businesses are considering local and regional sovereign cloud providers for new cloud workloads, rather than moving off existing relationships with US providers, for the time being.
“It’s not really about the migration. It’s more about the new workloads that are being developed right now and the workloads that still sit on premises that will be migrated,” he said.
While European users are hoping to migrate services from US hyperscalers, the level of integration with those providers’ proprietary services is creating a barrier to complexity, he said.
The US provider market has seen a slew of announcements with providers offering so-called “sovereign” services to European users. Microsoft has promised data processing in Europe in what it calls the EU Data Boundary, including in-country processing for Microsoft 365 Copilot interactions in 15 countries.
Amazon Web Services made its European Sovereign Cloud generally available in January, expanding so-called Local Zones, which the vendor says are “entirely located within the EU, and physically and logically separate from other AWS Regions.”
Google and Oracle have also taken steps to strengthen cloud sovereignty in Europe. However, European users are not convinced these services will mitigate the risks currently concerning them, Buest claimed.
“US cloud providers have technically isolated organizations or environments in Europe. Oracle and AWS, they also have created a kind of governance structure around it, with its own organization in Germany, with own managing directors and advisory boards.
“But the AWS European Sovereign Cloud GmbH is a 100 percent subsidiary of Amazon Inc. There are still dependencies. Both Oracle and Amazon are still operating in these clouds. They don’t give up control, and there are dependencies on the US parent companies.”
The Register asked AWS, Google, Microsoft and Oracle to comment. ®
Updated at 17.07 UTC on 9 February, 2025, to add: to add: a spokesperson at AWS sent us a statement contesting Gartner’s viewpoint. It claimed:
“These dedicated European subsidiaries maintain direct management and control over the AWS European Sovereign Cloud infrastructure and operations, and are led by EU citizens who are obligated to abide by European laws and to act in the best interest of the AWS European Sovereign Cloud.”
