SAP is launching a major initiative to enhance digital sovereignty and AI innovation in Europe through its SAP Sovereign Cloud portfolio, emphasizing secure, compliant, and scalable cloud solutions.

This initiative includes the development of infrastructure in SAP data centers across Europe, such as Germany's Delos Cloud, and supports on-premises private cloud deployments, with plans to invest over 20 billion euros ($23 billion) over the next decade.

The goal is to enable European organizations to maintain control over their data, reduce dependence on US-based hyperscalers, and address concerns related to data ownership, privacy, and compliance with regulations like GDPR.

SAP’s sovereign cloud solutions are designed with security features like kill switches and full control over patches and updates, even when integrating third-party hardware such as US-built servers.

This move responds to geopolitical concerns, especially with US legislation like the CLOUD Act, which allows American authorities access to data stored by US tech giants, raising data sovereignty issues for European clients.

European leaders are pushing for increased digital independence to counter US tech dominance, and SAP’s investment aims to help Europe catch up by fostering regional cloud infrastructure and AI development.

SAP’s focus is on serving highly regulated industries and the public sector, providing solutions that address sovereignty concerns while supporting innovation and growth.

The expansion aims to alleviate privacy concerns related to regulations like GDPR and Schrems II, encouraging organizations hesitant to move sensitive workloads to hyperscaler clouds.

SAP is also developing solutions like Delos Cloud, in partnership with Microsoft, to serve public sector needs, offering on-site options for organizations requiring complete data control.

The rise of generative AI has increased security concerns, prompting investments in private cloud and hardware upgrades by major players to ensure AI innovation without compromising data sovereignty.

While SAP emphasizes control, it acknowledges US legislation like the CLOUD Act and FISA Section 702 pose challenges, but its European-managed infrastructure is less vulnerable to US government access when data remains outside US servers.

SAP clarifies it is not a provider of infrastructure but offers tailored solutions, integrating existing hyperscaler technologies where appropriate to meet client needs.

Key clients such as the Federal Employment Agency and defense manufacturer Hensoldt have adopted SAP’s sovereign cloud solutions, highlighting demand for secure, compliant cloud environments.