Policy-level shift: Europe eyes for U.S. cloud independence

Abdel El Ayyadi
Jul 17
5 min read

Europe is accelerating efforts to reduce reliance on American hyperscalers—AWS, Microsoft Azure, and Google Cloud. Bolstered by new Dutch government backing, this policy-level shift reflects a broader ambition: boosting digital sovereignty and strengthening infrastructure resilience across the continent.

Why this matters

As long as Europe depends on U.S.-based cloud services, it remains vulnerable to extraterritorial regulations like the CLOUD Act and political interference. The push toward cloud independence isn't just technical; it's strategic. This shift signals a new phase of Europe's digital maturity, aiming to reclaim control over critical data infrastructure.

What’s driving Europe’s cloud strategy reboot?

1. Sovereignty and geopolitical risk

The U.S. CLOUD Act allows American authorities to access data held by U.S. firms abroad—a red flag for European officials and enterprises. OVHCloud CEO Benjamin Revcolevschi put it bluntly:

"The choice of a cloud provider is no longer just a technical matter, but also a strategic issue."

The Dutch Parliament has echoed this sentiment, recently passing motions to develop a sovereign national cloud. Lawmakers warned that Europe is effectively "one executive order away from losing access to critical technology."

2. Industrial and policy alignment

Europe is not starting from scratch. The European Commission has green lit €1.2 billion in funding under the IPCEI initiative to build pan-European cloud infrastructure. Corporate heavyweights like Airbus, EDF, and Telecom Italia are lobbying for a sovereign infrastructure fund. Projects like Gaia-X and EuroStack are picking up speed, focused on building a full-stack, EU-native alternative to U.S. clouds.

3. Enterprise mindset shift

The business world is catching up. A TechInformed survey found over 60% of UK IT leaders plan to move away from U.S. providers, with nearly half considering cloud repatriation. NVIDIA CEO Jensen Huang's call for "sovereign AI" is gaining traction, especially with governments wary of AI models trained and hosted entirely abroad.

Intelligent speculation: Where could this go?

1. Hybrid sovereignty becomes the norm

Rather than completely replacing U.S. clouds, the likeliest scenario is a hybrid one: U.S. hyperscalers adapting their models to comply with local sovereignty requirements while regional providers scale up. This dual approach enables both resilience and practicality.

2. U.S. players localize—fast

Microsoft, AWS, and Google are already responding. Microsoft has promised full EU-data boundary services, governed by a European legal entity and compliant with EU law. Expect increased investments in local data centers, transparency pledges, and sovereignty tools as standard offerings.

3. Internal fragmentation slows momentum

While France, Germany, and the Netherlands push ahead, others may resist due to cost or political alignment with U.S. trade interests. Without fast EU-wide coordination on cloud security standards (e.g., EUCS), progress could splinter.

4. Consulting and advisory firms step in

As complexity grows, private-sector advisors are pivoting. According to a recent Devoteam report:

“Customers aren’t just asking 'What cloud should I use?'... They're asking 'Which parts of my data must stay sovereign? Which services can run outside the EU?'”

This demand creates space for specialized consulting, especially around hybrid cloud architecture and compliance.

Questions that deserve attention

Can Europe realistically compete with U.S. tech giants?

It depends on how you define "compete." In terms of raw R&D budget and scale, probably not. But in terms of regulation, local trust, and vertical expertise (e.g., government, healthcare), Europe could carve out meaningful advantages.

Will EU countries agree on a single cloud security standard?

So far, progress has been slow. The EUCS framework is still debated internally. Some countries want stronger sovereignty guarantees, while others worry about U.S. retaliation. The window to create a harmonised standard is closing fast.

Could U.S. cloud firms be forced out of critical sectors?

Not entirely—but restrictions are likely. Sensitive industries like defence, public health, and law enforcement may soon face mandatory EU-hosting requirements. This won’t be an outright ban, but a strategic reshuffling.

What role will China play in this equation?

A quieter subplot: while EU rhetoric targets the U.S., some European states may begin exploring Chinese cloud options like Alibaba Cloud for diversification—especially in emerging markets. This raises a new wave of sovereignty and security debates.

What are the next steps for China?

China may capitalize on Europe's sovereignty push by offering highly localized cloud solutions under strict contractual separation from mainland governance. Expect Alibaba Cloud and Huawei Cloud to emphasize local partnerships, EU certifications, and sovereign infrastructure commitments. Whether Europe embraces these offerings—or treats them as a geopolitical Trojan horse—will depend heavily on the balance between cost, risk appetite, and political alignment.

Strategic upside for Europe

Market growth for EU vendors: OVHCloud, Scaleway, Capgemini, and others could scale rapidly with public and private investment. This could also give rise to new EU-native players in the IaaS and PaaS space, particularly in highly regulated industries like healthcare, finance, and defence.
Resilience by design: Sovereign clouds can help protect against supply chain shocks, legal overreach, and service disruptions tied to foreign government mandates. By keeping critical infrastructure under regional control, the EU strengthens its ability to respond to geopolitical instability.
Job creation and innovation: IPCEI-backed projects are expected to generate thousands of high-skill jobs across data science, cybersecurity, and AI. Additionally, universities and research centers may partner more closely with these sovereign initiatives, fostering a new generation of cloud engineers and policy-informed technologists. The ripple effects could be transformative—not only in tech, but in EU-wide digital competitiveness.

Major challenges ahead

U.S. resistance: Hyperscalers will not concede market share without a fight. Big Tech lobbying in Brussels is already intensifying, with companies warning of unintended consequences for innovation and competitiveness. U.S. diplomats have also voiced concerns over protectionist tendencies in EU digital policies, framing them as veiled trade barriers. Expect increased legal scrutiny, pricing incentives, and targeted PR campaigns aimed at both consumers and policymakers.
Cost and complexity: Sovereign infrastructure is expensive. EuroStack's projected €300 billion investment is only the beginning. The complexity lies not only in the physical buildout of data centers and network architecture but in designing governance, access protocols, and cross-border operational standards that satisfy both local and EU-wide compliance. The risk is building sovereign infrastructure that ends up fragmented, under-utilised, or technologically outdated before it scales.
Coordination failure: Without clear policy alignment across member states, the EU risks building a patchwork of incompatible systems. This is further complicated by domestic political pressures. For instance, France and Germany are pushing for stricter sovereignty definitions, while smaller economies fear being left behind in implementation. The upcoming European Parliament elections and leadership transitions in key institutions like the European Commission may delay legislative momentum or shift cloud sovereignty down the priority ladder. Political will, not just technical planning, will be a decisive factor in the next phase of implementation.

Leadership voices weigh in

Amid the shifting regulatory, geopolitical, and market landscape, influential figures in both the private and public sectors have voiced their perspectives on what Europe’s digital sovereignty journey really entails. These statements reveal not just alignment or opposition, but a growing recognition that the cloud conversation has moved beyond infrastructure—into strategy, control, and power.

Brad Smith, Microsoft President:

“We respect Europe's right to control its data and we will align with its legal frameworks.”

Matthias Bauer, ECIPE Analyst:

“Without swift policy reform, Europe could miss out on €1.2 trillion in economic gains.”

Revcolevschi, OVHCloud:

"Strategic autonomy is no longer optional—it's urgent." "Strategic autonomy is no longer optional—it's urgent."

What this means

For companies: Now is the time to rethink your cloud strategy. Multi-cloud and sovereign-compatible solutions offer both compliance and flexibility.
For policymakers: Fast-tracking EU-wide certification (EUCS) and accelerating investment will make or break this transition.
For U.S. providers: Compliance alone won’t be enough. Trust, localization, and transparency will determine long-term relevance in Europe.

My thought

Europe’s cloud pivot is more than just tech policy. It’s a battle over control, resilience, and the next phase of digital power. The continent has the talent, capital, and urgency. Whether it can overcome internal fragmentation and external pressure will define the future of its digital independence.

The next 12 to 18 months will reveal whether Europe's ambition translates into autonomy—or whether sovereignty remains an aspiration locked behind firewalls it doesn’t yet control.