Gartner revised its forecast of European sovereign-cloud IaaS spending to $12.6bn for 2026, an 83% jump from $6.9bn in 2025, with a further rise to $23.1bn projected for 2027 1. IaaS, infrastructure as a service, is rented computing capacity, the servers and storage that organisations use instead of running their own. Sovereign cloud is the slice of that supplied under European jurisdiction and data-residency rules. The revision confirms the tripling trajectory flagged in earlier briefings and aligns with the procurement demand CADA is designed to channel toward European providers, of which France's Health Data Hub migration off Microsoft is an early case. The scale still needs context: sovereign cloud remains about 15% of the total European cloud market, so the headline growth is fast off a small base rather than a tilt in the wider market, which US hyperscalers still dominate.
Gartner sees EU sovereign cloud up 83%
Gartner revised European sovereign-cloud infrastructure spending up to $12.6bn for 2026, an 83% jump on 2025, though it still sits at roughly 15% of the market.
Gartner lifted European sovereign-cloud spending to $12.6bn for 2026, fast growth off a 15% base.
Deep Analysis
Sovereign cloud is cloud computing from providers that are not subject to US law. The concern is that US legislation called the CLOUD Act allows American authorities to demand data from US cloud companies anywhere in the world, even data about European governments and citizens stored on European servers. Gartner, a research firm, now estimates European spending on sovereign cloud infrastructure will reach $12.6 billion in 2026, up 83% from last year. That sounds large, but it is still only about 15% of the total European cloud market. The remaining 85% runs on services from Amazon, Microsoft and Google. The fast growth reflects companies completing reviews they started after a 2020 court ruling that said storing EU citizens' data on US cloud services was legally risky.
European sovereign cloud spending is growing at 83% year on year because two structural triggers converged in 2025-2026. First, the Schrems II ruling (2020) invalidated Privacy Shield and created legal uncertainty for any EU personal data on US cloud infrastructure; that ruling forced procurement reviews across the continent that are now completing as contract renewals.
Second, the Noyb complaints against EU institutions using Google Analytics and Meta Pixel (resolved 2023-2024) established that data supervisory authorities will enforce against institutional users as well as providers, creating board-level liability that procurement directors cannot ignore.
The residual 85% US hyperscaler share tells the structural counter-story: migration inertia, managed-services gaps, and pricing advantages keep most European cloud workloads on US platforms regardless of regulatory pressure. The sovereign segment is growing fast from a low base; it is not yet displacing incumbent share.
- Opportunity
European sovereign cloud providers such as OVHcloud, Scaleway and Hetzner are the primary beneficiaries of the $12.6bn market; CADA's procurement mandates will accelerate contract conversion through 2027-2028 as public-sector renewals cycle.
- Consequence
The 15% sovereign share against 85% US hyperscaler share confirms that CADA and procurement mandates have not yet shifted enterprise workloads; the sovereign growth story remains confined to public-sector and regulated-industry verticals.
Update #8 · Sovereignty law adopted; $40bn US chip buy
