• There are renewed efforts to develop sovereign digital platforms in Europe
• There’s no doubt that the ambition exists, but that isn’t enough
• A massive regional capital investment plan is needed but is, so far, only being hinted at

In case you missed it, there’s a massive effort right now to light a (new) fire underneath Europe’s sovereign tech/cloud/AI/digital services sector, exemplified by the recent formation of the European Sovereign Tech Industry Alliance (ESTIA) and the associated call to action by a dozen European companies headed up by two of the region’s biggest telcos – see CEOs of DT and Orange issue digital sovereignty call to action.

And we’ll come back to that alliance’s ‘pledge’ statement in a moment… First, though, some of the latest developments. 

The sovereign tech trend is global – see Indigenous tech fuels BSNL’s revival from India, for example – but in Europe alone there has been a ramp up in activity in recent weeks and months. Just in the past few days: Belgian telco Proximus teamed up with France’s Mistral AI to develop AI services for European users underpinned by “sovereign infrastructure” with the aim of offering AI “made in and for Europe”; French firms Bouygues Telecom and Prisme.ai announced the development of an agentic AI platform for the telco that “serves performance, transparency and European sovereignty”; and Veon and MeetKai struck a “strategic sovereign partnership” to develop and train next-generation large language models (LLMs) that will enable the deployment of local-language agentic AI services across Veon’s operating markets. 

In addition, giant German software firm SAP announced “the next stage of its vision for European digital sovereignty with the launch of EU AI Cloud.” This, the company says, is a “sovereign AI and cloud offering designed for Europe. SAP now offers a truly full-stack sovereign cloud offering, empowering customers to select the right level of sovereignty and deployment for their needs, whether in SAP’s own datacentres, on trusted European infrastructure or as a fully managed solution on-site. EU AI Cloud supports EU data residency and full sovereignty, helping ensure that every organisation can meet its unique regulatory and operational requirements.” 

That offer is likely to get some traction, especially as it’s from SAP, which is the region’s largest indigenous cloud services provider but the only European company that featured in Synergy Research Group’s list of the top-20 cloud services providers in the third-quarter of this year. And it’s not near the top of the pile. As the chart, below, shows, there are no European companies in the top eight – SAP is one of the ‘Others’ and is one of a group of firms that have a global market share of around 1%. 

Earlier this year, the Synergy Research team took a look at the European cloud services market and found that during the first half of this year, the region’s cloud services players accounted for only a 15% share between them of a market that was worth around €36bn in the first six months of 2025. SAP and Deutsche Telekom were the biggest local companies, with a European cloud services market share of about 2% each, followed by OVHcloud, Telecom Italia (TIM), Orange and then a host of smaller local companies.
 

Meanwhile, the US hyperscalers dominate the global and regional markets and continue to invest heavily in datacentre infrastructure in key markets across Europe and Asia as well as North America.  

The prospects for European companies becoming bigger players in the region’s cloud services sector don’t seem promising, mainly because they can’t match their US counterparts – which invest about €10bn per quarter between them in the region’s datacentres – for capital investment scale. 

This might be why the launch ‘pledge’ published by the dozen companies that jointly launched ESTIA, doesn’t mention investment directly at all. Instead, it calls on Europe’s lawmakers to deliver a regulatory framework that will help local companies. 

“The European cloud industry is ready to deliver,” they stated. “We have the talent, the technology and the ambition. Now, we need the political will to match,” they stated. 

The approach appears to be to call for regulatory and political support that could potentially lead to greater investment from within Europe for the region’s cloud and AI infrastructure. The ESTIA members want a clear definition of sovereign cloud in the European Commission (EC)’s upcoming Cloud and AI Development Act (due to be presented in spring 2026) and a procurement policy that would require the public sector operations of EU member states to act as anchor customers for EU sovereign cloud services. 

But even if they got their wishes, how long would that take and to what extent would that move the needle? 

In the meantime, the hyperscalers continue to pump money into Europe with a promise to support the sovereign service requirements of European enterprises. Unless unparalleled local financial support for Europe’s cloud and AI infrastructure is forthcoming, and quickly (without waiting for lawmakers to boil the legal ocean), then it’s hard to see how Europe will ever develop datacentre and cloud services players that have any real clout or scale and can truly act as rivals to the US and, to a lesser extent, the Chinese giants. 

The one ray of hope is the €150bn European AI Champions initiative, which is backed by venture capital firm General Catalyst and European companies such as ASML, Airbus, Siemens, Infineon, Philips and Volkswagen. The EC includes that sum in the €200bn that it says it can “mobilise” through its InvestAI initiative, which is currently pumping €20bn into European AI factories as part of the AI Continent Action Plan and which could increase to €50bn. 

But these are all possible numbers dependent on multiple factors – it’s not money going into facilities right now, which is what Europe needs if it’s to achieve any of its sovereign ambitions.

This is one of the topics that will be discussed during TelecomTV’s Digital Sovereignty Forum in London on 3 December – if you can make it, come and join in.    

- Ray Le Maistre, Editorial Director, TelecomTV