Why European Companies Still Run on American Cloud Infrastructure
Recently, many Europeans have switched to European alternatives and realised that many companies still rely on Big Tech behind the scenes. However, this is finally starting to change.
The trigger was not a single event but an accumulation: the return of aggressive American trade politics, growing uncertainty about long-standing alliances, and a deepening unease about the degree to which European digital infrastructure depends on companies headquartered in a country whose strategic priorities are visibly shifting.
For many European organisations, the question of where their data lives and who controls their digital operations stopped being theoretical.
Understanding how we got here requires understanding how the dependency was built in the first place.
How the Dependency Was Built
The Starting Point: When a founder launches a company in Lisbon, Stockholm, Paris, or Berlin, the infrastructure decision they face is almost entirely a financial one dressed up as a technical one.
AWS Activate, Google for Startups, and Microsoft Founders Hub offer hundreds of thousands of euros in cloud credits to early-stage companies, alongside introductions to venture capital networks and access to engineers who know these platforms deeply. For a company with six months of runway, this is not a vendor preference. It is arithmetic.
European alternatives exist and are credible. OVH, Hetzner, and Scaleway run startup programmes of their own. But the gap in scale is real. The American programmes combine credits with ecosystem access, investor introductions, and technical support that European providers cannot yet match at the same level.
The Trap: The complication arrives two or three years later. The startup has grown. Engineers have been hired who know these platforms deeply. Data pipelines, authentication systems, and machine learning workflows are all built on proprietary managed services. By the time the monthly bill has climbed into five figures, switching to a European alternative is no longer an ideological question. It is a calculation of engineering time and migration risk that consistently loses to building product instead.
The free credits created dependency before the company was large enough to care about it. The talent market reinforced it further.
The Talent Problem
The US Trap: Cloud certifications from AWS, Azure, and Google have become the professional baseline for infrastructure roles across Europe. Hiring managers filter for them. Salary bands are anchored to them. Engineers pursue them because that is where the career signals are.
European providers have not yet built a certification ecosystem that the broader market recognises and values. This means companies default to the platforms where the available talent already speaks the language.
Companies hire from the available talent pool. Engineers train for the platforms the market rewards. Training budgets flow toward American certifications. European providers remain technically credible but professionally peripheral. The cycle repeats.
Breaking it requires more than building better servers. It requires building an alternative credentialing ecosystem that the market actually values, which is a much slower and harder task.
What "Data Sovereignty" Actually Means
The Common Misconception: Many companies believe they have resolved the sovereignty question by selecting EU regions on AWS or Azure. For GDPR storage requirements and basic regulatory audit purposes, they are often correct. The data does not cross borders in ordinary operations.
The Uncomfortable Reality: Under the US CLOUD Act, enacted in 2018, American authorities can compel US-headquartered companies to produce data held anywhere in the world, including in European data centres. The legal jurisdiction follows the corporate headquarters, not the hardware.
A privacy-focused application built on American cloud infrastructure is, regardless of its GDPR compliance posture, subject to a legal framework in which a foreign government can compel access to its data. Standard Contractual Clauses create contractual obligations, but they are instruments of private contract, not barriers to sovereign legal authority.
The deeper issue is architectural. Even a company operating in full GDPR compliance, with data stored in Frankfurt, remains dependent on its provider for continued operation. The provider controls the control plane. Software updates originate from the United States. Critical platform decisions are made by organisations whose obligations run first to their own shareholders and, when required by law, to their own government.
For most of the last decade, European companies accepted this because the political relationship made it feel like a manageable abstraction. That comfort is now being reassessed.
The Geopolitical Reckoning
The New Variable: The current political direction of the United States has introduced a risk into European infrastructure planning that was not seriously considered before. When strategic alliances feel stable, dependency on American platforms is a cost-optimisation question. When they do not, it becomes a business continuity question.
The concern is not primarily that an American cloud provider would arbitrarily terminate services to European customers tomorrow. It is more subtle. American tech companies operate under American law, respond to American political pressure, and make strategic decisions based on American interests.
In an environment where the US has demonstrated willingness to use economic and technological relationships as negotiating leverage, European dependency on American digital infrastructure becomes a pressure point that exists regardless of whether it is ever used. The European energy sector spent years building dependency on a single external supplier and discovered what that meant when the political relationship changed. European business leaders looking at their cloud vendor lists are drawing the same parallel.
Already Changing: The French government's move away from Microsoft Teams is not an isolated case. It reflects a broader pattern of public sector organisations reconsidering arrangements that were previously treated as settled. Each of these decisions, taken at scale across the public sector, creates installed base for European providers, which justifies deeper service investment, which improves their competitive position for private sector customers.
A Turning Point Is Forming
The Demand Signal Has Changed: Users are beginning to care where their data is processed. European consumers and businesses, particularly in sectors with heightened privacy sensitivity, are increasingly asking which jurisdiction governs the infrastructure behind the services they use. This creates commercial pressure that did not exist at the same intensity before.
European venture capital and public funding mechanisms are directing capital specifically toward sovereign infrastructure. The European Innovation Council and national development banks have recognised that the market gap itself is a strategic opportunity. As more companies switch, they contribute open-source tooling and community knowledge to European platforms. As more engineers build careers on European infrastructure, they create the talent pool that makes it easier for the next company to follow.
Network effects built the dependency over two decades. They can, slowly, build alternatives too.
An Honest Assessment
European companies are not running on American infrastructure because they are indifferent to sovereignty. They are running on it because the economic incentives, the talent markets, and the ecosystem density made it the path of least resistance at every decision point along the way.
Those structural forces have not disappeared. But they are now competing with something new: genuine strategic concern, at the level of governments, enterprises, and individual users, about the risks of digital dependency on a partner whose reliability feels less certain than it once did.
The gap is closing. Slowly, and unevenly, but closing.
The dependency was built over twenty years of structural incentives pointing in one direction. The conditions to reverse it are better than they have ever been. The window is open.