Britain's former largest cloud provider UKCloud went bust nearly 4 years ago.

In September of 2025 The Ministry of Defence signed a £400M deal for 'sovereign' cloud with Google, exfiltrating hundreds of millions, and with it the capability for structural investment in UK cloud companies. While also providing legal access to sensitive security data directly to the US government, with a legal prerogative for unlimited access. Given that the UK is host to dozens of military bases, a mercurial and untrustworthy regime in Washington serves as a powerful reminder of the impermanence of geopolitical stability over the lifetime of critical infrastructure.

The lack of proper cloud infrastructure in the UK is no minor gap in the market. It is state-endorsed irresponsibility, akin to selling access to critical national industries and physical infrastructure. Regardless of relational concerns, this sensitive data can never be sovereign within the current legal framework.

In Numbers

Hyperscale US providers currently account for 48% of the London data centre market. By 2027, that figure is projected to reach 66%.

While Civo is a real player and there are a host of small providers, the Google deal is part of a trend that has seen European market share halve in the last decade. Such deals reduce the ability of home-grown business to innovate while also directly harming the government's ability to invest in local business solutions.

The Lie of US 'Sovereignty'

In June 2025, Microsoft told the French Senate it cannot guarantee the sovereignty of European data. UK public sector data in Microsoft cloud could be processed in more than 100 countries.

The same legal reality applies to all US hyperscalers. No contractual or technical measure can override the legal obligations of a provider to its home jurisdiction. At this scale, regulatory fines are treated as a cost of doing business, and providers have previously indicated they would withdraw services (and therefore data access) from markets rather than operate under legal frameworks they consider incompatible with their obligations.

The reliance on hyperscale cloud is not dependency in the way of a narcotic, it is not something that sustains a habit and causes withdrawal but remains potentially manageable long-term. It is carcinogenic. It actively brings harm by swallowing smaller local players, offshoring income, and concentrating control outside of the entity that entrusts its data.

What now

For UK businesses, the options are:

1. Accept the risk and hope US policy remains friendly forever.
2. Look to awesome GDPR compliant EU providers like Hetzner, OVH, Scaleway, and accept the post-Brexit irony.
3. Build on internal capability and hope that they can stay afloat as the market is consumed around them.
4. Demand better. Support real local service providers. Push for responsibility in the government's procurement strategies. Make those providers viable in the long term.

If you are a European you should continue to invest in and use your cloud infra, it might one day be a key leverage point. Sovereign hyperscale cloud is the substrate of modern state capability, as well as that of all manner of businesses operating within a territory.

Indeed, local cloud is a matter of 'use it or lose it' and both regulatory controls and the buy-in of local enterprise is crucial to a thriving technical infrastructure in a nation.

eigeninfra helps European businesses assess their US cloud exposure and plan realistic migration paths. Book a consultation to start the conversation.