The European Union is preparing a significant escalation in its drive for technological independence, with officials considering new rules that could restrict governments across the bloc from using American cloud providers to process sensitive public-sector data.
The discussions, now taking place inside the European Commission ahead of a major “Tech Sovereignty Package” expected later this month, mark one of the clearest signs yet that Europe is moving to reduce its dependence on U.S. technology infrastructure amid worsening geopolitical and economic tensions with Washington.
According to officials familiar with the talks, cited by CNBC, the proposed measures would not completely ban U.S. cloud companies from operating in Europe’s public sector. However, they could sharply limit the ability of American providers such as Amazon Web Services, Microsoft, and Google Cloud to host or process highly sensitive government information in sectors including finance, healthcare, and judicial systems.
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“The core idea is defining sectors that have to be hosted on European cloud capacity,” one European Commission official told CNBC.
The move pinpoints growing alarm in Europe over what policymakers increasingly see as a vulnerability: the bloc’s overwhelming dependence on U.S. technology firms for critical digital infrastructure.
For years, American hyperscalers have dominated Europe’s cloud market, providing the backbone for everything from government databases and hospital systems to banking operations and enterprise computing. But that dependence has become politically sensitive as relations between Brussels and the administration of Donald Trump have deteriorated over trade disputes, industrial policy, defense spending, and technology regulation.
European officials have also become increasingly concerned about the implications of the U.S. CLOUD Act, a 2018 law that allows American law enforcement authorities to request data from U.S.-based companies regardless of where the information is physically stored. That legislation has fueled fears within Europe that sensitive public-sector information hosted on American platforms could ultimately fall under U.S. legal jurisdiction.
As a result, digital sovereignty has rapidly evolved from a niche policy issue into a central strategic priority for the European Union.
The upcoming “Tech Sovereignty Package,” expected to be unveiled on May 27, is designed to strengthen Europe’s autonomy in key technological sectors, particularly cloud infrastructure, semiconductors, and artificial intelligence.
The package is expected to include the Cloud and AI Development Act and Chips Act 2.0, both aimed at encouraging the growth of European-controlled alternatives to dominant U.S. and Asian technology providers.
One Commission official said the current discussions focus specifically on public-sector workloads rather than private companies. Still, the proposals could fundamentally reshape the cloud computing landscape across Europe because government contracts are among the most valuable and strategically important parts of the market.
Under the proposals being discussed, governments and public institutions handling highly sensitive information could be required to use sovereign European cloud infrastructure or platforms operating under stricter European oversight.
“U.S. cloud providers could face restrictions in certain sensitive and strategic sectors,” one official said.
The discussions underscore how Europe is increasingly viewing technology infrastructure through the lens of national security and geopolitical resilience rather than simply efficiency or cost. That shift has accelerated dramatically since the outbreak of multiple global crises in recent years, including the pandemic, semiconductor shortages, the war in Ukraine, and escalating tensions between the United States and China.
European policymakers now worry that dependence on foreign-controlled technology systems could leave the bloc exposed during future geopolitical confrontations or economic disputes. The Commission itself acknowledged earlier this year that Europe faces a “significant problem of dependence on non-EU countries in the digital sphere,” warning such reliance could create vulnerabilities in critical sectors.
The latest cloud sovereignty discussions also reflect broader concerns that Europe risks falling permanently behind the United States and China in the global technology race. American firms currently dominate cloud infrastructure globally, with Amazon Web Services, Microsoft Azure, and Google Cloud controlling the overwhelming majority of the European cloud market.
European alternatives remain comparatively small and fragmented, though governments across the bloc are increasingly trying to change that. France has emerged as one of the strongest advocates of technological sovereignty. Earlier this year, Paris announced plans to deploy a government-developed video conferencing platform called Visio across state institutions by 2027, replacing services such as Microsoft Teams and Zoom in many official settings.
The European Commission has also begun directly funding sovereign cloud projects. In April, Brussels awarded a €180 million tender to four European cloud initiatives intended to supply infrastructure for EU institutions and agencies. One of the projects includes a partnership involving French defense and aerospace company Thales and Google Cloud, illustrating the complex balancing act Europe faces between reducing dependence on U.S. firms while still leveraging their technology.
The cloud sovereignty push could carry major implications for global technology competition. For American cloud giants, Europe represents one of the world’s most important markets. Any restrictions on handling government data could create both financial and reputational challenges, while also encouraging other regions to pursue similar digital sovereignty strategies.
The proposals also arrive at a moment when cloud infrastructure is becoming even more strategically important because of the explosive rise of artificial intelligence. AI systems require enormous amounts of computing power, storage, and data processing, making control over cloud infrastructure increasingly central to economic competitiveness and national security.
The EU’s strategy appears aimed not only at reducing foreign dependence, but also at ensuring Europe retains greater control over the infrastructure underpinning the next generation of AI-driven economies.
A European Commission spokesperson described the broader package as “about Europe waking up and getting its act together.” The spokesperson added that the initiative would “improve opportunities for sovereign cloud offerings” and support “a more diverse set of cloud and AI service providers.”
However, the proposals face political and practical hurdles. This is because any final measures would require approval from all 27 EU member states, many of which maintain deep technological and commercial ties with U.S. companies. It is also believed that limiting access to American cloud platforms could increase costs, reduce efficiency, and slow innovation for European public institutions.