Analysis: Europe's Ambitions for Sovereign Cloud and AI Infrastructure

Source: Investing.com, Author: Navamya Acharya, published on November 9, 2025

1. Article Summary

The article describes the increasing efforts of the European Union (EU) and its member states to achieve digital sovereignty in the areas of cloud and artificial intelligence (AI). Given the dominance of US providers like Amazon, Microsoft and Google (together over 80% market share in the European IaaS market), the EU is promoting the development of its own legally and technically sovereign cloud infrastructures.

According to Gartner, so-called "sovereign clouds" accounted for about 10% of the European cloud market in 2024; by 2028, this share is expected to rise to 47% – a growth of 86% per year. Despite higher operating costs (10-20% above public cloud), the trend is supported by regulatory frameworks such as GDPR, the EU Data Act and the Data Governance Act.

A central element of the strategy is the planned "Cloud and AI Development Act", which provides for a tripling of European data center capacities as well as investments of €200 billion in AI. Of this:

• €20 billion for five large "AI-Gigafactories" with over 100,000 processors each
• €10 billion for 13 smaller factories with about a quarter of this capacity

Companies such as Deutsche Telekom, SAP, RWE, IONOS, HOCHTIEF and Dassault Systèmes are participating in initiatives to build such infrastructures. The EU Commission has already received 76 expressions of interest from 16 member states.

2. Key Players

| Player | Role / Contribution | |--------|---------------------| | EU Commission | Management of cloud and AI expansion program; investment promotion | | Deutsche Telekom | Building a sovereign industrial AI cloud in Munich with 10,000 GPUs | | SAP | Technology partner, not a direct operator or investor | | IONOS & HOCHTIEF | Applicants for building AI-Gigafactories | | RWE | Energy partner for data center locations (former coal and nuclear power plants) | | Dassault Systèmes / Outscale | Participation in French "NumSpot" project with SecNumCloud certification |

3. Opportunities

• Digital sovereignty: Reducing dependence on US cloud giants.
• Regulatory resilience: Compliance with European data protection and security standards.
• Industrial policy impulse: Building high-performance data centers strengthens EU competitiveness.
• Regional value creation: Location development through reindustrialization (e.g., use of former power plant sites).

4. Risks and Challenges

• Cost factor: 10-20% higher operating costs compared to public clouds.
• Fragmentation: National projects could lead to isolated solutions without coordination.
• Technology dependence: Continued high dependence on US chips (e.g., Nvidia H100).
• Market dynamics: US companies respond quickly with local compliance offerings (e.g., Microsoft's EU Data Boundary).

5. Evaluation According to Strategic Framework (Prompt Criteria)

| Category | Assessment | Rationale | |----------|------------|-----------| | Political Significance | High | EU positions cloud and AI as strategic key technologies | | Technological Relevance | Very high | Focus on high-performance data centers and AI compute | | Economic Potential | Medium to high | €200 billion investment volume; strong promotional logic | | Regulatory Influence | High | EU Data Act and Governance Act as drivers | | Sovereignty Impact | High | Building own infrastructure and certification models | | Sustainability / Energy Relation | Medium | Cooperation with energy suppliers (RWE), but high power consumption |

6. Conclusion

The article makes clear that Europe is about to understand cloud and AI sovereignty as a major industrial policy project. While the technological and regulatory framework is clearly defined, implementation will depend on financing, energy availability and international competitive dynamics.

In the long term, Europe's approach could lead to a third digital model – between US commercialization and Chinese state control – provided the projects are efficiently coordinated and technologically open.

Analytical Assessment:

The article reflects a strategic shift: AI and cloud infrastructure are understood as part of European autonomy policy. The decisive factor will be whether projects like the planned "AI-Gigafactories" are actually implemented – and whether European chips, software and governance structures can keep pace.