Earlier, AWS officially launched its European Sovereign Cloud, backed by a €7.8 billion investment in Brandenburg, Germany. The infrastructure is physically and logically separated from AWS global regions, managed by a new German parent company (AWS European Sovereign Cloud GmbH), and staffed exclusively by EU residents. On paper, it checks every compliance box for data residency and operational sovereignty. AWS CEO Matt Garman called it “a big bet” for the company—and it is. The question is whether it’s the right bet for Europe.
The Technical Reality: Real Isolation, Real Trade-offs
The technical separation is genuine. An AWS engineer who deployed services to the European Sovereign Cloud confirmed on Hacker News that proper boundaries exist—U.S.-based engineers can’t see anything happening in the sovereign cloud. To fix issues there, they play “telephone” with EU-based engineers. The infrastructure uses partition name *aws-eusc* and region name *eusc-de-east-1*, completely separate from AWS’s global regions. All components—IAM, billing systems, Route 53 name servers using European Top-Level Domains—remain within EU borders.
But this isolation comes with costs. As that same engineer warned, “it really slows down debugging issues. Problems that would be fixed in a day or two can take a month.” This is the sovereignty trade-off in practice: more control, less velocity. The service launches with approximately 90 AWS services, not the full catalog. Plans exist to expand into sovereign Local Zones in Belgium, the Netherlands, and Portugal, but this remains a subset of what AWS offers globally.
For some workloads, this trade-off makes sense. For others, it’s a deal-breaker.
The Legal Problem: U.S. Ownership, U.S. Jurisdiction
Here’s the uncomfortable truth that AWS’s marketing carefully sidesteps: technical isolation doesn’t create legal isolation. AWS, headquartered in America, remains subject to U.S. jurisdiction. The CLOUD Act allows U.S. authorities to compel U.S.-based technology companies to provide data, regardless of where it is stored globally. Courts can require parent companies to produce data held by subsidiaries.
This isn’t theoretical hand-wraving. Microsoft had to admit in a French court that it cannot guarantee data sovereignty for EU customers. When Airbus executive Catherine Jestin discussed AWS’s sovereignty claims with lawyers late last year, she said: “I still don’t understand how it is possible” for AWS to be immune to extraterritorial laws.
Cristina Caffarra, founder of the Eurostack Foundation and competition economist, puts it bluntly:
A company subject to the extraterritorial laws of the United States cannot be considered sovereign for Europe. That simply doesn’t work.
The AWS response focuses on technical controls—encryption, the Nitro System preventing employee access, and hardware security modules. These are important safeguards, but they don’t address the core legal issue. If a U.S. court orders Amazon.com Inc. to produce data, technical barriers become legal obstacles the parent company must overcome, not protections.
Europe’s Broader Response: The Cloud and AI Development Act
AWS’s launch comes as Europe finalizes its own legislative response. The EU Cloud and AI Development Act, expected in Q1 2026, aims to strengthen Europe’s autonomy over cloud infrastructure and data. As Christoph Strnadl, CTO of Gaia-X, explains:
For critical data, you will never, ever use a US company. Sovereignty means having strategic options — not doing everything yourself.
The Act is part of the EU’s Competitiveness Compass and addresses a fundamental problem: Europe’s 90% dependency on non-EU cloud infrastructure, predominantly American companies. This dependency isn’t just about data residency—it’s about strategic autonomy. When essential services depend on infrastructure governed by foreign law, questions arise about jurisdiction, resilience, and what happens during geopolitical disruption.
Current estimates indicate that AWS, Microsoft Azure, and Google Cloud collectively control over 60% of the European cloud market. European providers account for only a small share of revenues. The Cloud and AI Development Act aims to establish minimum criteria for cloud services in Europe, mobilize public and private initiatives for AI infrastructure, and create a single EU-wide cloud policy for public administrations and procurement.
Importantly, Brussels isn’t seeking to ban non-EU providers. As Strnadl notes:
Sovereignty does not mean you have to do everything yourself. Sovereignty means that for critical things, you have strategic options.
The Gaia-X Lesson: Sovereignty Washing
Europe has been down this path before. Gaia-X, launched in 2019, intended to create a trustworthy European data infrastructure. Then American companies lobbied to be included. Once Microsoft, Google, and AWS were inside, critics argue, Gaia-X lost its purpose. The fear now is that AWS’s European Sovereign Cloud represents sophisticated “sovereignty washing”—placing datacenters on European soil without resolving the fundamental legal issue.
Recent European actions suggest growing awareness of this problem. Austria, Germany, France, and the International Criminal Court in The Hague are taking concrete steps toward genuine digital independence. These aren’t just policy statements—they’re actual migrations away from U.S. hyperscalers toward European alternatives.
The Market Reality: No Complete Migration in 2026
Forrester predicts that no European enterprise will fully shift away from U.S. hyperscalers in 2026, citing geopolitical tensions, volatility, and new legislation, such as the EU AI Act, as barriers. The scale of dependency is too deep, the feature gap too wide, and the migration costs too high for rapid change.
Gartner forecasts European IT spending will grow 11% in 2026 to $1.4 trillion, with 61% of European CIOs and tech leaders wanting to increase their use of local cloud providers. Around half (53%) said geopolitical factors would limit their use of global providers in the future. The direction is clear, even if the pace remains uncertain.
This creates a transitional period where organizations must make pragmatic choices. For non-critical workloads, AWS’s European Sovereign Cloud may be sufficient. For truly sensitive data—government communications, defense systems, critical infrastructure—organizations need genuinely European alternatives: Hetzner, Scaleway, OVHCloud, StackIT by Schwarz Digits.
What AWS Actually Delivers
Let’s be precise about what AWS European Sovereign Cloud achieves. It provides:
- Data residency within the EU
- Operational control by EU residents
- Governance through EU-based legal entities
- Technical isolation from the global AWS infrastructure
- An advisory board of EU citizens with independent oversight
What it doesn’t provide is independence from U.S. legal jurisdiction. For compliance requirements focused purely on data residency and operational transparency, this may be sufficient. For organizations requiring protection from U.S. government data requests, it fundamentally isn’t.
As Eric Swanson from CarMax noted in a LinkedIn post:
Sovereign cloud offerings do not override the Patriot Act. They mainly reduce overlap across other contexts: data location, operational control, employee access, and customer jurisdiction.
Looking Forward: Strategic Autonomy, Not Autarky
Europe’s path forward isn’t about digital isolationism. As Strnadl emphasizes, technology adoption that involves a paradigm shift doesn’t happen in two years. The challenge is adoption, not frameworks. “Cooperation needs trust,” he says, “and trust needs a trust framework.”
The Cloud and AI Development Act, expected this quarter, will provide that framework. It will set minimum criteria, promote interoperability, and establish procurement rules that favor sovereignty for critical workloads. The question for organizations is: what constitutes critical?
For email, public administration, political communication, defense systems—the answer should be obvious. These require European alternatives. For other workloads, AWS’s European Sovereign Cloud may strike an acceptable balance between capability and control.
The Bottom Line
AWS’s €7.8 billion investment is real. The technical isolation is real. The economic contribution to Germany’s GDP (€17.2 billion over 20 years) is real. What’s also real is that Amazon.com Inc., a U.S. company, ultimately controls this infrastructure and remains subject to U.S. law.
For organizations seeking compliance checkboxes and data residency guarantees, AWS European Sovereign Cloud delivers. For organizations requiring genuine independence from U.S. legal jurisdiction, it remains fundamentally insufficient. That’s not a criticism of AWS’s engineering—it’s a statement of legal reality.
The sovereignty question Europe faces isn’t technical. It’s strategic: do we accept managed dependency or build genuine autonomy? AWS offers the former. Only European alternatives can provide the latter.
The market will decide which answer matters more.






