Publication Date: 11/10/2025

Author: Michaël Aussems
Source: ITdaily.com
Publication Date: 11/10/2025
Summary Reading Time: 3 minutes

Executive Summary

Microsoft is expanding its Sovereign Cloud with new EU data centers and local AI processing, yet cannot fulfill fundamental sovereignty promises: The US CLOUD Act continues to obligate the company to release data to US authorities – regardless of storage location. The opening of the Belgian data center and the introduction of the EU Data Boundary are primarily technical advances, but do not solve the fundamental legal problem of digital dependency on US technology corporations.

Critical Key Questions

How sovereign can a cloud be when the provider is legally obligated by US law to release data globally?
What strategic alternatives do European organizations have to US cloud providers – and why are these not consistently promoted?
Is the "EU Data Boundary" genuine data sovereignty or merely a marketing tool to alleviate regulatory concerns?

Scenario Analysis: Future Perspectives

Short-term (1 year):
Increased adoption of Microsoft's solution despite sovereignty concerns, as technical features (local AI processing) partially meet compliance requirements. Parallel growing political pressure for genuine European cloud alternatives.

Medium-term (5 years):
Regulatory tightening by EU institutions could force US providers to make structural changes (local subsidiaries with legal separation). Emergence of hybrid multi-cloud strategies as risk mitigation.

Long-term (10-20 years):
Either technological fragmentation (regional cloud ecosystems) or transatlantic data agreement 2.0 with fundamental legal reforms. Quantum computing could render existing encryption paradigms obsolete.

Main Summary

a) Core Topic & Context

Microsoft responds to European sovereignty requirements with technical solutions, while the company itself admits that the US CLOUD Act prevents genuine data independence. The expansion shows the conflict between market ambitions and legal realities.

b) Key Facts & Figures

Belgian Data Center: Opening November 2025 (announced end of 2021)
Microsoft 365 Copilot: Local processing active in 15 countries
Expansion by 2026: 11 additional countries, incl. Germany and Spain
Azure Local: Scaling to hundreds of servers with Nvidia GPU support
EU Data Boundary: AI data processing exclusively in the EU [⚠️ Legal enforceability unclear]

c) Stakeholders & Affected Parties

Primary: European companies and authorities with compliance requirements
Secondary: Microsoft partners with new "Digital Sovereignty Specialization"
Critically affected: Organizations with highly sensitive data (military, healthcare, critical infrastructure)

d) Opportunities & Risks

Opportunities:

Improved performance through local processing
Compliance facilitation for EU data protection directives
New business models for specialized partners

Risks:

Pseudo-sovereignty could suggest false security
Lock-in effect with proprietary Microsoft technologies
Potential conflicts between EU and US jurisdiction

e) Action Relevance

Decision-makers should evaluate hybrid cloud strategies and prepare exit scenarios. The legal review of CLOUD Act influence remains essential. In parallel: Investment in European alternatives as strategic diversification.

Supplementary Research

Relevant Context:
Swiss Army Chief Demands Digital Sovereignty – Resistance Against Microsoft Cloud Migration

The Swiss Army exemplifies resistance against US cloud dependency. This underscores that Microsoft's technical improvements do not address the fundamental sovereignty concerns.

Source Index

Primary Source:
Microsoft Strengthens Sovereign Cloud with New Features and Belgian Datacenter – ITdaily.com

Supplementary Sources:

Swiss Army Chief Demands Digital Sovereignty – Clarus.news

Verification Status: ✅ Facts verified on 11/10/2025