Global sovereign cloud infrastructure spending is projected to reach $80 billion in 2026, an increase of over 35 percent from 2025. The research from Gartner also estimates that Europe’s spending will grow by 83 percent.

These figures aren’t surprising given the extent to which US hyperscalers overshadow the European cloud market. While companies like AWS, Microsoft Azure, and Google Cloud dominate, European providers only hold a 10 percent share, with the largest player accounting for just two percent.

This leaves organizations across the continent in a precarious position, especially given the current geopolitical climate. The lack of a competitive European alternative underscores an urgent need for a sovereign cloud ecosystem that safeguards data, autonomy, and innovation.

The case for sovereignty

In addition to enhancing resilience, cloud sovereignty gives European organizations the ability to maintain ownership and legal authority over their data, applications, and infrastructure within cloud environments. Unlike public cloud platforms, which are largely controlled by US hyperscalers, sovereign cloud solutions are designed, hosted, and operated entirely within the regions they serve.

This regional model ensures adherence to national data protection and security requirements, while reinforcing control over sensitive assets. This is a decisive advantage for sectors that manage personally identifiable information (PII) or high-value intellectual property (IP).

Implications for AI

US dominance in cloud computing also extends into Artificial Intelligence. A significant share of AI workloads continues to be trained and run on a small group of US-based platforms. As a result, any operational disruption or policy shift affecting these providers can create knock-on effects across both traditional digital services and AI-powered applications.

With AI fast becoming central to innovation, it’s crucial that Europe’s data and computational capacity remain under European jurisdiction to safeguard compliance and long-term competitiveness.

Big tech ‘sovereign’ clouds

Despite increasing calls for digital independence, several providers that market themselves as ‘sovereign’ still rely on software frameworks and control layers developed and maintained by US companies. This reliance calls into question the true autonomy of such platforms when essential software and hardware components are still externally controlled.

An example of this is AWS European Sovereign Cloud. While this model improves data residency, operational separation, and alignment with European regulations, it is still operated by a US provider. Sovereignty is not only about where systems are deployed or where staff are located, but who ultimately has control. Even with European-based entities, personnel, and operations, strategic authority remains outside Europe.

In exceptional legal or geopolitical situations, the European entity could not override decisions taken by the parent company, including rulings related to service suspension or termination. As long as the governance of the platform itself remains external, product direction, update cycles, and long-term architectural decisions continue to be defined outside of Europe, which ultimately limits strategic and technological autonomy.

Collaboration as the foundation of competitiveness

No single European cloud provider has the scale to rival US hyperscalers independently. Strengthening Europe’s share of the cloud market therefore depends on collective action. Regional providers must be brought together to create a stronger, more balanced, and resilient ecosystem capable of competing globally.

Industry alliances such as Cloud Infrastructure Services Providers in Europe (CISPE), alongside initiatives like the Important Project of Common European Interest on Next Generation Cloud Infrastructure and Services (IPCEI-CIS), are instrumental in this effort. These frameworks unite companies to advance open, vendor-neutral cloud and Edge technologies that foster fair competition and reinforce Europe’s digital sovereignty.

Creating a more level playing field also requires greater cloud neutrality and portability. In practical terms, organizations must be able to shift workloads smoothly between providers. This enables them to deploy applications wherever they achieve the best mix of performance, cost, functionality, security, compliance, availability, and resilience, without being constrained by vendor lock-in.

This vision can be delivered through a neutral software layer that coordinates on-demand access to infrastructure resources across multiple providers. Such a platform would support application developers, service providers, and infrastructure vendors alike, driving innovation and enabling small and medium-sized providers to expand their market presence.

Building ‘virtual hyperscalers’

By pooling resources, expertise, and market reach, European providers can establish distributed cloud-Edge infrastructures that operate flexibly and at scale. Portability would allow applications to run without modification and move freely between environments, while interoperable management tools would simplify the administration of resources drawn from multiple providers.

The ultimate aim is to create a ‘virtual hyperscaler’ - a federated ecosystem that combines the scale, capacity, and geographic footprint of multiple European providers to compete effectively with US hyperscalers.

Scaling Europe’s digital future

The recent rise in sovereign cloud spending signals that Europe has realized that its digital future cannot rely on infrastructure beyond its control. Cloud sovereignty is no longer a theoretical concept for European organizations; it is a strategic necessity for resilience, regulatory compliance, and sustained competitiveness in a data-driven economy.

Reasserting Europe’s digital autonomy will require coordinated efforts across public institutions and private industry. By deepening collaboration through initiatives such as IPCEI-CIS and CISPE, Europe can build interoperable, vendor-neutral cloud ecosystems that empower domestic providers and secure critical assets. The development of ‘virtual hyperscalers’, built on shared infrastructure and distributed cloud-Edge networks, offers a credible path to global competitiveness while upholding security and sovereignty.