The German software powerhouse SAP has committed to investing more than €20 billion (approximately $23.3 billion) over the next decade to establish sovereign cloud infrastructure across Europe. This bold undertaking represents not only a strategic expansion of cloud services, but also a decisive bet on artificial intelligence, data governance, and Europe’s future autonomy in digital infrastructure. By keeping all operations—from hardware to software—rooted firmly within the borders of the European Union, SAP is aiming to restructure the continent’s technological backbone around sovereignty and compliance, protecting businesses from the risks of foreign dependency.

SAP’s Localized Cloud Vision

At the heart of SAP’s plan is the launch of a new infrastructure-as-a-service (IaaS) platform, built and operated by the company itself. Unlike the global cloud offerings traditionally dominated by Microsoft Azure or Amazon Web Services, this infrastructure will be exclusively localized, entirely European in structure and scope.

SAP is also introducing an option few competitors dare to: giving customers the ability to deploy SAP-operated infrastructure directly within their own data centers. This “on-site sovereign cloud” guarantees that sensitive customer data never leaves EU soil, eliminating reliance on intermediaries and reducing exposure to overseas jurisdictions.

Such measures align with a singular aim: full compliance with Europe’s General Data Protection Regulation (GDPR), one of the strictest sets of privacy laws in the world.

A Response to Sovereignty Demands

For SAP, the shift toward sovereign solutions is not just a regulatory obligation—it is a strategic necessity.

“Innovation and sovereignty cannot be two separate things — it needs to come together,” said Thomas Saueressig, SAP’s Executive Board Member for Customer Services and Delivery, during a virtual press briefing Tuesday. His remarks captured the urgency felt across Europe’s tech community: the pressing need to access cutting-edge tools like artificial intelligence within a framework that guarantees sovereignty.

The push has gained momentum amid global political and economic shifts. With rising geopolitical tensions, many governments and enterprise leaders see dependence on foreign-controlled cloud systems as a risk to national security and corporate stability. What’s emerging is not just a technology race, but a movement to reclaim strategic control over the critical digital systems that power advanced technologies including AI and big data analytics.

Europe’s AI and Cloud Ambitions Converge

SAP is far from alone in confronting this challenge. Both Amazon and Microsoft have announced their own sovereign cloud initiatives inside the EU, recognizing mounting pressure from regulators and customers alike. However, SAP presents itself as Europe’s natural champion in this space: a company headquartered in the region, governed under the same EU regulations, and free from the jurisdictional pull of U.S. legal frameworks.

This advantage could prove strategically significant. By keeping everything—from hardware infrastructure to service delivery—anchored in Europe, SAP positions itself as a trusted provider in a landscape where legal and political implications have become as important as digital performance.

The timing dovetails with the European Commission’s own agenda. Brussels has declared artificial intelligence and sovereign infrastructure as top policy priorities, after years of warning that the region lagged behind the United States and China in critical tech sectors. Earlier in 2025, the Commission unveiled plans to allocate €20 billion toward "AI gigafactories"—massive European complexes designed to host supercomputers, train large-scale AI models, and build a self-sustaining ecosystem for next-generation innovation.

Though SAP confirmed only a supporting role in this initiative, the overlap is hard to ignore. Cloud sovereignty and AI development are tightly interlinked. Without secure, indigenous data infrastructure, AI systems cannot function responsibly within Europe’s strict compliance and regulatory frameworks. SAP’s investment, therefore, is not just about cloud services; it lays the groundwork for Europe’s AI independence.