Introduction: The sovereignty paradox
The European Union prides itself on being the world’s digital regulator. Its privacy regime has inspired copycat laws from Brazil to California. Yet Europe’s digital infrastructure is dominated by non‑European companies. Only about 4 % of global cloud capacity is owned by European providers. The rest belongs to U.S. hyperscalers subject to the CLOUD Act, which allows American authorities to compel access to data stored abroad. This paradox-strict rules without sovereign infrastructure—has become a strategic vulnerability. The war in Ukraine, trade tensions with the U.S. and the possibility of extraterritorial surveillance have galvanized EU policymakers and businesses to seek alternatives.
Why digital sovereignty matters?
Digital sovereignty refers to the ability of a state or region to control its own digital infrastructure, data and technological destiny. Dependence on foreign cloud providers creates three risks. Geopolitical risk: Access to critical digital services can be interrupted by sanctions, export controls or geopolitical disputes. Legal risk: Data stored on U.S. servers may be subject to surveillance under the CLOUD Act, undermining Europeans’ privacy rights. Economic risk: Europe’s tech sector may become a mere consumer of services rather than an innovator, sending billions in cloud spending across the Atlantic. These risks were largely theoretical until recently, but in 2024 and 2025 they became real: U.S. export controls on chips impacted European AI projects, and discussions of “digital sovereignty” entered mainstream European politics.
Geopolitical triggers: Trump, COVID and war
The second Trump presidency and the pandemic highlighted Europe’s vulnerability. During the COVID‑19 crisis, supply‑chain disruptions revealed Europe’s dependence on American hardware and cloud services. In parallel, the return of Donald Trump to the U.S. presidency created fears of unilateral policies that could weaponize digital infrastructure. The war in Ukraine further emphasised the need for secure and sovereign communications. Together these events shifted digital sovereignty from a niche policy to a core pillar of European strategic autonomy.
Proposed solutions: EuroStack, sovereign clouds and open federations
Responding to these challenges, European actors have proposed several solutions:
- EuroStack: A proposed European cloud infrastructure stack that integrates open‑source technologies and hardware designed in Europe. EuroStack aims to provide a competitive alternative to U.S. hyperscalers and to ensure compliance with EU law by default. It emphasises modularity and openness, encouraging contributions from small and medium‑sized enterprises (SMEs) and academia.
- Sovereign clouds: National or regional cloud services operated by European telecoms and IT companies under strict local control. French provider OVHcloud, Deutsche Telekom’s Open Telekom Cloud and T‑Systems’ offerings are examples. These services promise that data remains within the EU and that foreign authorities cannot access it without European court orders.
- Federated architectures: Initiatives like Gaia‑X promote federation rather than centralisation. Gaia‑X defines standards for interoperability, identity management and data sovereignty, enabling different providers to connect seamlessly while respecting local rules. This model reflects Europe’s preference for decentralisation and open governance.
Multicloud strategies and pragmatic independence
Analysts caution that full independence by 2026 is unlikely. Migrating all workloads from U.S. hyperscalers would be costly and disruptive. Many European organisations therefore adopt multicloud strategies, combining local sovereign providers for sensitive workloads with global providers for scale and advanced services. This approach balances sovereignty with practicality. To succeed, organisations must invest in cloud‑agnostic architectures, portability tools and staff training. They must also budget for potential cost increases, as sovereign clouds often have higher unit prices than hyperscaler offerings. Policymakers can help by providing subsidies, simplifying compliance and fostering a competitive ecosystem of European providers.
Deep dive: A history of Europe’s digital governance
Europe’s digital sovereignty debate did not emerge overnight. The EU’s early focus on competition policy led to landmark antitrust cases against Microsoft and Google. The GDPR established global norms for privacy. The Digital Markets Act and Digital Services Act seek to curb platform power and improve online safety. Despite this regulatory leadership, Europe failed to cultivate its own cloud champions. Historical underinvestment, risk‑averse capital markets and fragmentation among member states hindered large‑scale tech projects. Initiatives like EuroHPC, which funded high‑performance computing, and ELIXIR, which built life‑science data infrastructure, show that European collaboration is possible. The challenge is scaling these efforts to general‑purpose cloud infrastructure.
Industrial policy and investments
To build EuroStack and sovereign clouds, Europe needs sustained investment. The EU’s Industrial Strategy and the NextGenerationEU recovery plan allocate funds for digital infrastructure. Public–private partnerships and state aid rules are being reexamined to support cloud projects. Political leaders advocate “buy European” policies for cloud and AI procurement. At the same time, policymakers stress that sovereignty should not become protectionism; Europe benefits from international collaboration and open markets. The goal is to build open and democratic digital sovereignty—one that enables innovation while protecting rights.
Data spaces, AI infrastructure and HPC
Digital sovereignty extends beyond cloud to data governance and high‑performance computing. The European Data Spaces initiative aims to create sector‑specific data commons for health, energy and agriculture, enabling secure data sharing while respecting privacy. Europe’s next‑generation high‑performance computing (HPC) projects, such as the Jupiter and LUMI supercomputers, provide local compute capacity for AI research. These initiatives reduce reliance on foreign compute clouds and foster a domestic ecosystem. However, they must integrate with EuroStack and sovereign clouds to be effective.
Comparative models: Lessons from other regions
Other regions offer instructive models. China built its own hyperscalers and banned foreign cloud providers, achieving sovereignty at the cost of openness. Russia attempted to localise data but relies heavily on Western technology. India emphasises data localization and a public digital infrastructure (UPI, Aadhaar) while remaining open to foreign investment. The United States, despite dominating the cloud market, debates antitrust enforcement and domestic supply chains. Europe must chart its own course: combining sovereignty with openness, and building democratic guardrails around digital infrastructure.
Environmental considerations
Sovereign clouds are not inherently greener than hyperscalers. Energy consumption depends on the efficiency of data centres and the electricity mix. Europe’s Green Deal and climate targets require that new digital infrastructure be energy efficient and powered by renewables. EuroStack could set sustainability standards and require providers to report carbon intensity. Since AI workloads drive electricity demand, linking sovereignty with clean energy policies is crucial.
Societal implications: Participation and labour
Digital sovereignty is not just about technology; it also involves society. Policy debates must include citizens, workers and civil society. For example, the rise of gig platforms has spurred calls for algorithmic transparency and worker rights. The EU’s Platform Worker Directive seeks to classify gig workers as employees and ensure that automated decisions can be contested. Sovereign infrastructure should integrate these labour protections. Education and digital literacy programmes can empower citizens to understand and shape digital policy. Open‑source communities and cooperatives could play a role in developing EuroStack components, democratising control.
Implementation challenges and next steps
Europe’s path to digital sovereignty faces obstacles. Fragmented regulations across member states create complexity. Incumbent hyperscalers offer unmatched economies of scale and a rich ecosystem of services. Switching costs and skill gaps deter migration. To overcome these challenges, policymakers must harmonise regulations, invest in skills development and incentivise adoption of sovereign solutions. Companies must perform due diligence, plan transitions carefully and avoid lock‑in. Public administrations can lead by example, migrating government workloads to sovereign clouds and adopting open standards.
Conclusion
Europe’s digital sovereignty dilemma is not insurmountable. By combining open‑source infrastructure, sovereign clouds, multicloud strategies and democratic governance, the continent can regain control over its digital future without closing itself off from the world. The coming years will test Europe’s resolve to move beyond regulation and invest in infrastructure. Success will depend on collaboration among governments, industry, civil society and academia. A sovereign, open and sustainable cloud ecosystem could serve as a model for the world.
About Akave Cloud
Akave Cloud is an enterprise-grade, distributed and scalable object storage designed for large-scale datasets in AI, analytics, and enterprise pipelines. It offers S3 object compatibility, cryptographic verifiability, immutable audit trails, and SDKs for agentic agents; all with zero egress fees and no vendor lock-in saving up to 80% on storage costs vs. hyperscalers.
Akave Cloud works with a wide ecosystem of partners operating hundreds of petabytes of capacity, enabling deployments across multiple countries and powering sovereign data infrastructure. The stack is also pre-qualified with key enterprise apps such as Snowflake and others.