With the escalation of geopolitical conflicts that have made issues of sovereignty and regulatory compliance to come to the fore, banks in Europe are reconsidering their reliance on US cloud and AI services. Several organizations all over Europe have already started making enquiries with several European providers including OVHcloud and Scaleway to lessen their cyber exposure and avoid being under the legal jurisdiction of foreign countries.
The move reflects deeper unease about U.S. laws like the CLOUD Act, which allows American authorities to request overseas data from U.S.-based firms. Executives at major banks, particularly in Germany and France, argue that such frameworks pose risks in a sector where confidentiality and compliance remain critical.
At the same time, European regulators are increasing pressure. The European Banking Authority has warned that overreliance on a narrow set of cloud suppliers could magnify operational disruptions during global disputes. In its latest reviews, the authority urged financial firms to diversify their technology strategies and prioritize sovereignty-friendly solutions.
Banks are beginning to respond. Deutsche Bank and BNP Paribas are in discussions with European cloud vendors, seeing value in keeping sensitive financial data within EU borders. Analysts point out that these partnerships align with the General Data Protection Regulation while offering resilience against external shocks.
Recent developments add urgency to the shift. One instance of the EU reliance on US technology that has already been impacted by U.S. export restrictions is advanced AI chip manufacturing in Europe.
On the other hand, the statements from the industry continue to insist on the need for investments within the country. Carnegie Endowment has suggested increased support for AI and cloud projects in Europe, arguing that the continent would not be able to maintain its competitiveness in the long run if it did not have its local infrastructure. Also, tech companies like Cisco have started launching data center solutions for the most vulnerable sectors, like the financial one, which are aimed at achieving sovereignty.
Looking forward, momentum appears to be building. Surveys of IT leaders across Europe and the UK show that more than half expect to reduce their reliance on U.S. providers within the next few years.
