The European cloud is no longer confined to the dispute over data storage locations. By 2026, the focus of negotiations will shift to jurisdiction, operational control, vendor lock-in and the price a company is prepared to pay for greater autonomy.
The scale of the problem is growing in line with cloud usage. In 2025, 52.7 per cent of businesses in the EU were purchasing paid cloud services, rising to 84.7 per cent amongst large firms. Furthermore, 40.9 per cent of all companies surveyed were already using services that Eurostat classifies as advanced and indicating a high degree of cloud dependency.
At the same time, Europe remains a consumer of technology rather than its main supplier. According to the Synergy Research Group, the European cloud infrastructure market reached 61 billion euros in 2024. AWS, Microsoft and Google controlled around 70 per cent of the market, whilst the combined share of European providers stood at 15 per cent and has remained virtually unchanged for several years. The largest of these, SAP and Deutsche Telekom, each held around 2 per cent.
This concentration is becoming more significant with the AI boom. In the second quarter of 2026, global spending on cloud infrastructure reached $143 billion, 43 per cent more than a year earlier. Synergy identifies generative AI as the main driver of market growth. The cloud is therefore no longer merely a back-end for business applications. Increasingly, it is also becoming an access layer to AI models, GPU power and developer tools.
Sovereignty has been given parameters
The EU’s response is looking less and less like a political slogan. The Cloud and AI Development Act, proposed in June, envisages at least a threefold increase in the capacity of data centres in the EU within five to seven years, as well as the introduction of a common European system for assessing cloud and AI sovereignty. The draft is at the legislative stage, but the regulatory direction is clear.
The Commission has previously tested a similar mechanism in its own procurement. Its Cloud Sovereignty Framework comprises 48 criteria grouped into eight areas: ranging from ownership structure and jurisdiction, through data, operations and the supply chain, to technology, security and legal compliance. The SEAL system ranges from a lack of sovereignty to a level requiring a fully European supply chain, from chips to software.
In April, the Commission awarded sovereign cloud contracts with a total maximum value of €180 million over six years. These were awarded to Post Telecom, in partnership with OVHcloud and CleverCloud; STACKIT; Scaleway; and Proximus, alongside partners including S3NS, a joint venture between Thales and Google Cloud.
This last example clearly illustrates the shift in definition. European sovereignty no longer necessarily means technology developed entirely within Europe. The Commission explicitly acknowledges that technologies from outside the EU can meet the required standards provided that control by entities from third countries is restricted.
Hyperscalers are not giving up the market
US providers have responded with their own solutions. In January, AWS launched the European Sovereign Cloud, with its first region in Brandenburg. The environment is physically and logically separated from other AWS regions, has separate IAM and billing systems, and operations are to be conducted from within the EU.
Microsoft is building a more layered model. It has completed the EU Data Boundary, is developing the Sovereign Public Cloud and Sovereign Private Cloud, solutions from national partners, and mechanisms to control remote access to European data. The company has also contractually committed to challenging any orders leading to the suspension of cloud services in Europe.
The market is therefore not divided into ‘European’ and ‘American’ clouds. Several levels of sovereignty are emerging, all based on the same or similar technology.
Autonomy comes at a price
Costs remain the most tangible limitation. The Commission’s analysis prepared for the Cloud and AI Development Act indicates that sovereign cloud prices are typically 10–30 per cent higher than those of a standard public cloud . A comparison of six AWS services from January 2026 revealed an average premium of around 15 per cent compared with the Frankfurt region.
This changes the economic equation. Sovereignty becomes a parameter similar to redundancy or the level of cybersecurity: it increases resilience, but may raise the cost of infrastructure and limit the availability of some services.
From January 2027, the Data Act will prohibit charging fees for switching providers, including for data migration. However, the regulation mainly removes the financial barrier. An application built around proprietary databases, AI services, APIs or PaaS tools may still be difficult and costly to migrate.
The European cloud will therefore not be a refuge from hyperscalers after the summer. Segmentation is more likely: different requirements for critical systems and sensitive data, and different ones for ordinary business applications. Sovereignty is no longer just a declaration. It is becoming a key element in architecture, contracts and budgets.
