US based hyperscalers continue to dominate digital infrastructure worldwide. Yet across Europe, there is a growing movement to protect data from both cyber threats and extraterritorial laws, and to ensure full regulatory compliance. Cloud sovereignty has become a cornerstone of this effort.
Cloud sovereignty ensures that data, workloads, operations, and digital infrastructure remain under the jurisdictional control of the country or region where they reside. It goes beyond simple data residency. For European organizations, it is about visibility and legal control over how and where sensitive information is stored, processed, transferred, and who can access it.
Why Cloud Sovereignty Matters for European Enterprises
For organizations across the EU, digital and cloud sovereignty are closely tied to trust, compliance, and competitiveness. Regulations such as the GDPR require that personal data remain protected under EU law. Noncompliance can result in severe fines and long term reputational damage.
The stakes are even higher for government agencies, operators of Critical National Infrastructure (CNI), and regulated industries such as healthcare and finance. These sectors handle highly sensitive data and face stringent compliance demands. For them, cloud sovereignty is essential to meet regional laws, build operational resilience, and reduce exposure to foreign surveillance.
Key Regulations and Standards Driving Cloud Sovereignty
The European Union has established some of the most comprehensive data protection and cybersecurity regulations in the world. Together, they shape the region’s push for a secure and sovereign digital ecosystem:
- GDPR: The foundation of EU data protection. It applies to any organization processing personal data of EU residents, regardless of location. GDPR enforces user consent, limits data collection and transfer, and demands strong encryption and privacy controls. For background on how this links to sovereignty, see the state of digital sovereignty in Europe.
- NIS2 Directive: Effective since 2024, NIS2 requires critical infrastructure and digital service providers to maintain cybersecurity programs, incident reporting, and supply chain risk management. It also mandates auditable records of communication and strong protection for cloud workloads. Learn more in our NIS2 compliance overview.
- EU Cloud and AI Development Act: Expected to launch in 2025, this Act will expand EU datacenter capacity and create a harmonized framework for secure, sustainable public sector cloud use. It complements national initiatives such as France’s “Cloud de Confiance” and Germany’s Gaia-X.
- EU Data Act: Coming into force in 2024, the Data Act aims to phase out vendor lock in by 2027, enabling interoperability between cloud providers and greater control for users over their own data.
Sovereign Cloud vs Private Cloud
Although both prioritize data protection, a sovereign cloud and a private cloud serve different purposes:
Private Cloud: A dedicated infrastructure for a single organization that offers customization, scalability, and security. However, it may not meet national or regional jurisdictional requirements. A private cloud hosted by a non EU provider can still fall under foreign legal access laws.
Sovereign Cloud: Adds legal, operational, and jurisdictional layers to ensure compliance with local regulations. It guarantees regional control, compliance with EU standards, and protection from foreign access requests. It is a private cloud built for sovereignty.
Evaluating European Cloud Providers
The European cloud market continues to grow rapidly, reaching approximately €61 billion in 2024. While US based hyperscalers still hold around 70 percent of the market, European providers are expanding quickly and strengthening sovereignty focused offerings.
Prominent EU cloud providers include OVHcloud, Hetzner, Scaleway, STACKIT, Exoscale, and Open Telekom Cloud. Many of these providers focus on highly regulated industries, offering sovereign cloud environments aligned with EU and country specific standards. See our overview of the best European alternatives to Big Tech.
Risks of Using US Jurisdiction Providers
US hyperscalers have announced “sovereign” cloud solutions for European clients, but they remain bound by American surveillance and data access laws. These include:
- CLOUD Act: The Clarifying Lawful Overseas Use of Data Act allows US authorities to request data from American providers, even when it is stored in the EU. Hosting data in European servers does not eliminate the risk of foreign access. Read more in our CLOUD Act and EU data sovereignty analysis.
- FISA Section 702: This provision of the US Foreign Intelligence Surveillance Act permits US intelligence agencies to collect data on non US citizens for national security purposes, without requiring traditional warrants.
Both laws directly conflict with GDPR, which requires a valid legal basis for cross border data transfers, such as a Mutual Legal Assistance Treaty. As a result, EU companies using US cloud services face a compliance paradox: their vendors may technically violate EU data protection standards. Explore the implications in our article on EU sovereignty and Big Tech encryption.
Best Practices for Achieving Cloud Sovereignty
European enterprises can take concrete steps to align with sovereignty principles while maintaining agility and innovation:
- Partner with EU headquartered providers that have transparent governance and certifications aligned with NIS2 and GDPR.
- Adopt open source platforms to increase transparency and avoid vendor lock in. Open architectures also enable better interoperability between providers.
- Implement enterprise controlled encryption keys so only your organization—not the cloud provider—can access sensitive data. This ensures protection even in shared infrastructure environments.
- Continuously monitor compliance and cybersecurity posture. Regularly audit data flows, encryption standards, and cross border transfers.
- Establish internal compliance frameworks aligned with EU regulations and local security standards, ensuring audits and incident response procedures remain within EU jurisdictions.
- Use hybrid or multi cloud models that distribute workloads across trusted and compliant providers. Deploy sovereign cloud solutions for sensitive workloads while using public cloud for less regulated data. This balance enables innovation without compromising control.
Conclusion
Cloud sovereignty is no longer optional for European enterprises. It is a strategic imperative that underpins digital independence, regulatory compliance, and long term trust. By selecting European providers, maintaining encryption control, and aligning governance with EU standards, organizations can ensure their cloud operations remain secure, compliant, and sovereign.
To learn how Wire enables sovereign collaboration and secure communication through end to end encryption and open source transparency, contact our team.
