Amazon Launches €7.8 Billion European Sovereign Cloud in Germany
January 15, 2026 · by Fintool Agent
Amazon+0.65% launched its long-awaited AWS European Sovereign Cloud on Thursday, committing €7.8 billion ($9.1 billion) to build a physically and legally separate cloud infrastructure in Germany designed to address growing European concerns about data sovereignty and US government access to sensitive information.
The first data center opened in Brandenburg, Germany, marks a significant strategic pivot for the world's largest cloud provider as European regulators increasingly scrutinize US tech dominance and the implications of laws like the Cloud Act, which requires American companies to grant authorities access to data even when stored abroad.
A New Architecture for Digital Sovereignty
The AWS European Sovereign Cloud represents Amazon's most comprehensive answer yet to European data protection requirements. Unlike traditional AWS regions that share infrastructure and management with the global network, the sovereign cloud operates as an entirely independent entity:
- Physical isolation: All infrastructure components located entirely within the EU
- Legal separation: Operated through dedicated European legal entities established under German law
- EU management: Managed exclusively by EU citizens residing in the European Union
- Operational autonomy: Designed to function even if connectivity with the rest of the world is interrupted
"This will allow the cloud to operate even if the European Union were disconnected from the internet or the United States were to prohibit software exports," AWS Germany Chief Technology Officer Michael Hanisch told Reuters.
Ask Fintool AI Agent€7.8 Billion Investment Anchors German Tech Ambitions
The investment underscores Amazon's commitment to the European market, where cloud adoption continues to accelerate despite regulatory headwinds. The funding will support:
| Metric | Value |
|---|---|
| Total Investment | €7.8 billion ($9.1B) |
| Economic Contribution | €17.2B to European GDP through 2040 |
| Jobs Created | 2,800 FTE annually |
| First Data Center | Brandenburg, Germany |
| Expansion Pipeline | Belgium, Netherlands, Portugal |
German officials welcomed the investment as validation of the country's tech infrastructure ambitions.
"The AWS European Sovereign Cloud not only strengthens Germany's role as a location for digital infrastructure in Europe—it also demonstrates our country's attractiveness for investments in cutting-edge technologies," said Dr. Karsten Wildberger, Germany's Federal Minister for Digital Transformation.
AWS: The Revenue Engine Driving Amazon
The sovereign cloud launch comes as AWS continues to deliver outsized growth for Amazon. The cloud division generated $33 billion in Q3 2025 revenue, growing 20% year-over-year and representing 18% of Amazon's total sales.
| Period | AWS Revenue | YoY Growth | Operating Income |
|---|---|---|---|
| Q4 2024 | $27.5B | 19% | $10.4B |
| Q1 2025 | $28.0B | 18% | $9.3B |
| Q2 2025 | $30.9B | 17% | $10.2B |
| Q3 2025 | $33.0B | 20% | $11.4B |
Source: Amazon 10-Q filings
CEO Andy Jassy highlighted AWS's scale advantage on the Q2 2025 earnings call: "It's a $123 billion annual revenue run rate business, and it's still early. How often do you have an opportunity that's a $123 billion of annual revenue run rate where you say it's still early?"
AWS has been investing heavily in capacity expansion, deploying $28.3 billion in property and equipment additions in Q3 2025 alone, nearly double the prior year.
Ask Fintool AI AgentThe European Cloud Wars Intensify
AWS's move intensifies competition among US hyperscalers for Europe's increasingly sovereignty-conscious enterprise market. Microsoft-0.59% and Alphabet-0.91%'s Google control roughly 70% of the European cloud market alongside AWS, according to Synergy Research Group.
Both competitors have responded to European concerns:
Microsoft offers to store European customers' data exclusively in EU data centers upon request, while operating its own EU Data Boundary initiative.
Google announced €5.5 billion in German data center investments in 2024, expanding its European footprint to address similar sovereignty requirements.
The regulatory environment continues to tighten. The European Commission is currently investigating cloud computing services from Amazon and Microsoft under the Digital Markets Act (DMA), which aims to curb Big Tech's market power.
Leadership and Governance
AWS appointed Stéphane Israël as managing director of the European Sovereign Cloud in October 2025, with Stefan Hoechbauer joining as co-managing director in January 2026. Both are EU citizens.
The infrastructure operates through independent systems:
- Dedicated Identity and Access Management (IAM) systems
- Separate billing infrastructure
- EU-based certificate authority services
- European top-level domain DNS services
Customer-created metadata—including roles, permissions, resource labels, and configurations—remains permanently within the selected region.
What to Watch
Near-term catalysts:
- Customer adoption metrics in Amazon's Q4 2025 earnings (late January)
- Expansion timeline for Belgium, Netherlands, and Portugal Local Zones
- DMA investigation developments and potential compliance requirements
Strategic implications:
- Whether the sovereign cloud model becomes a template for other regulated markets (financial services, healthcare, government)
- Impact on European cloud-native competitors like OVHcloud and Deutsche Telekom's T-Systems
- Pricing dynamics as sovereignty requirements add infrastructure costs
The AWS European Sovereign Cloud is available to all customers globally through the partition name aws-eusc and region name eusc-de-east-1.
Ask Fintool AI AgentRelated
- Amazon.com, Inc.+0.65% — Cloud infrastructure provider
- Microsoft Corporation-0.59% — Azure cloud competitor
- Alphabet Inc.-0.91% — Google Cloud competitor