Concerns around digital sovereignty are rapidly becoming one of the most important debates shaping the future of cloud computing, artificial intelligence, and government technology infrastructure across Europe and the UK.
The discussion recently gained attention after Chi Onwurah, chair of the UK Science, Innovation and Technology Select Committee, criticized Britain’s broader technology strategy and warned about growing dependence on a small group of major US technology companies. Her remarks pointed to reliance on providers such as Microsoft and Amazon Web Services, while also referencing Palantir Technologies because of its involvement in NHS and defence-related contracts. She also raised concerns about foreign-controlled technology supply chains supporting critical public infrastructure.
At the centre of the debate is the meaning of “digital sovereignty,” a term that is increasingly used by governments but often interpreted differently. In practical terms, sovereignty refers to a country maintaining legal authority and control over its citizens’ sensitive data, including where that information is processed, accessed, and governed. Experts argue that sovereign data should only fall under the jurisdiction of the nation to which it belongs, rather than being exposed to foreign legal systems or overseas regulatory reach.
The issue has become especially significant in the era of public cloud computing. Before large-scale cloud adoption, most government and enterprise data was stored and processed inside domestic datacentres, limiting both physical and remote access to national borders. While foreign software vendors occasionally required access for maintenance or support purposes, control over infrastructure largely remained local.
That model changed as governments and businesses increasingly adopted cloud services operated by US-headquartered providers. As organizations shifted toward subscription-based cloud platforms, concerns began emerging over whether sensitive national data could still be considered sovereign if it was processed through globally distributed infrastructure.
Much of the modern sovereignty debate intensified following the Schrems II ruling, a landmark European court decision that challenged how personal data could be transferred outside the EU to countries viewed as having weaker privacy protections. Since then, governments across Europe have pushed for tighter oversight of where data travels and who ultimately controls cloud infrastructure.
Although sovereignty concerns are often framed as a problem tied only to hyperscalers, industry analysts say the challenge is broader. Companies including IBM, Oracle Corporation, and Hewlett Packard Enterprise also face pressure to adapt their cloud and data processing models to meet stricter sovereignty expectations.
The debate has also been intensified by geopolitical tensions. European governments have become increasingly cautious about long-term dependence on foreign-owned digital infrastructure, particularly as cloud computing and artificial intelligence become more deeply connected to defence, healthcare, and public services. Analysts note that data infrastructure is now being viewed similarly to energy or telecommunications infrastructure: strategically important and politically sensitive.
Among the prominent providers, Microsoft was one of the earliest companies to experiment with sovereign cloud initiatives, including a dedicated German version of Microsoft 365. However, that model was eventually discontinued in 2022. Critics argue the company now faces greater difficulties adapting because many of its cloud services operate through highly interconnected global systems spread across more than 100 countries.
Questions around transparency have also created challenges. Rep
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