European cloud market faces tension between sovereignty and migration costs

The European cloud market is experiencing a shift driven by artificial intelligence and a move toward multi-cloud environments. According to the EuroCloud Pulse Check 2026 by techconsult, 53 percent of surveyed German companies plan to use European cloud providers for AI applications within the next two years. European providers are increasingly being utilized as additional options for specific workloads, particularly where data control, legal security, and compliance are priorities. For instance, 63 percent of companies prefer European providers for business process software, and over 60 percent prefer them for identity management and data residency solutions.

Conversely, a study commissioned by the CCIA Europe—a group including Amazon, Google, and Meta—warns of significant economic risks associated with prioritizing European cloud services. The study, conducted by the European Centre for International Political Economy, suggests that a shift away from US-based providers could cost European countries up to 115 billion euros over the next decade. This figure is linked to the potential impact of the European Commission’s proposed Cloud and AI Development Act (CADA). The report estimates costs of 33.3 billion euros for the public sector and 80 billion euros for the private sector due to migration and software reprogramming requirements.