European organizations will increase their sovereign cloud infrastructure spending by 83 percent this year, from $6.9 billion in 2025 to $12.6 billion in 2026, according to forecasts published Monday. The research firm predicts the figure will reach $23.1 billion by 2027 as geopolitical tensions accelerate a shift away from US hyperscalers.
Worldwide sovereign cloud infrastructure spending will total $80 billion in 2026, a 35.6 percent increase from 2025. Europe's growth rate ranks third globally behind the Middle East and Africa (89 percent) and Mature Asia/Pacific (87 percent).
Public sector organizations will drive the majority of demand, followed by heavily regulated industries including energy, utilities, and telecommunications responding to geopolitical concerns.
This investment will shift 20 percent of current workloads from global to local cloud providers, with 80 percent coming from new digital solutions or legacy workloads awaiting migration.
European investment will more than triple from 2025 to 2027, growing at nearly twice the rate of North America and China, though both regions will maintain higher absolute spending levels in 2026 at $47 billion and $16 billion respectively.
The trend reflects broader European IT spending growth, projected at 11 percent in 2026 to reach $1.4 trillion. A November 2025 survey found 61 percent of Western European CIOs plan to increase their use of local cloud providers.
Major US cloud providers have responded with sovereign offerings. Amazon launched its AWS European Sovereign Cloud in Germany this January, while Microsoft and Google have expanded sovereign cloud capabilities within the EU Data Boundary.
European companies are also investing in regional alternatives. Schwarz Gruppe, owner of supermarket chain Lidl, has committed €11 billion to its STACKIT cloud provider, and French provider OVHcloud has made similar investments.
End-user public cloud services spending will grow 24 percent in 2026, with investments in Europe becoming more turbulent as CIOs focus on digital sovereignty.
These trends reflect broader cloud computing challenges in 2026, including AI-driven demands and energy constraints.
