Sovereign-by-Design: How European Regulations Shape the Global Landscape of Digital Cloud Infrastructures

In recent years, the European Union has promulgated a comprehensive regulatory framework encompassing various aspects of the digital domain, from General Data Protection to the regulation of artificial intelligence. This paper explores the tangible effects of these policies on global industry players, with a particular focus on Amazon Web Services (AWS), the largest cloud provider worldwide. On October 25, 2023, AWS introduced the AWS European Sovereign Cloud, a key component of the AWS Digital Sovereignty Pledge. This initiative, aimed at public sector organizations and highly regulated industries, demonstrates AWS's commitment to providing sovereignty controls to its customers. The paper delves into AWS's sovereign-by-design approach, elucidating its four foundational pillars: Data residency, operational autonomy, encryption, and resilience. By examining central AWS press releases, the research reveals critical insights into the impact of regulatory policies on digital infrastructure providers and their role in reshaping the global digital infrastructure landscape. The findings underscore the pivotal role of territoriality in achieving digital sovereignty within the cloud sector, influencing the localization of physical infrastructure capacities. Furthermore, the analysis elucidates that the imperative for sovereign-by-design infrastructures is driven by the evolving sovereignty needs of customers, a response to an increasingly stringent regulatory environment. Consequently, sovereigntist policies enacted by national or supranational authorities wield a profound influence on the global distribution of cloud infrastructures, thereby shaping the distribution of global power capabilities in the digital realm.