Across global technology circles, a growing skepticism toward U.S. cloud giants is driving a fresh wave of strategic reassessments among non-U.S. enterprises, especially in the United Kingdom and broader Europe. A recent report from Civo, a British cloud service provider, signals a pronounced shift: now, more than ever, issues of data sovereignty, compliance, and cost volatility are motivating IT leaders to reconsider their reliance on U.S.-based cloud infrastructure. While this trend is not yet a wholesale exodus, it signals several transformative pressures facing the global cloud market, with potentially vast implications for the future of data management, artificial intelligence deployment, and geopolitical tech policy.
Rising Distrust in U.S. Cloud Providers
A central finding in Civo’s research is that one in three organizations no longer fully trust U.S.-based Big Tech firms—namely Amazon, Microsoft, and Google—with the stewardship of their business-critical data. This figure underscores a growing realization among IT decision-makers: in a rapidly evolving regulatory and threat environment, the location and jurisdiction of one’s data are strategic factors, not mere technical details.Perhaps even more striking is that nearly half (45%) of surveyed UK IT leaders are openly contemplating cloud repatriation—the process of moving data and computing workloads away from public clouds back to on-premises or hybrid environments. The gravity of this consideration is amplified by the fact that these so-called “hyperscalers” currently command roughly two-thirds of the world’s cloud market. Their dominance has historically provided persuasive economies of scale, but the risk calculus has shifted. Today, compliance, transparency, and geopolitical stability increasingly outweigh raw cost or convenience.
Data Sovereignty: From Buzzword to Boardroom Imperative
The concept of data sovereignty—ensuring that data is subject to the laws and governance structures of the nation where it is collected and stored—has rapidly ascended to boardroom priority. Civo’s survey found that 61% of British IT leaders now view data sovereignty as a central strategic goal, trailing only price among drivers for cloud strategy adjustments.Stringent EU and UK data protection frameworks, such as GDPR and the UK Data Protection Act, have raised the bar for compliance and consumer rights, while also clarifying the lines of liability and oversight. This regulatory clarity is prized by organizations facing the prospect of fines, reputational damage, or operational disruption if their service providers fail to safeguard sensitive data or comply with local statutes.
Mark Boost, CEO of Civo, articulates this shift succinctly: “People are more alert than ever to just how valuable their data is, and it’s been astonishing how quickly cloud repatriation and sovereignty have become leading strategic considerations for IT leaders.” His statement reflects not just a passing trend but a long-term realignment of priorities across the tech industry.
Tariffs and Economic Uncertainty Compound Risks
On top of privacy and compliance worries, IT leaders are contending with mounting economic headwinds. Recent trade disputes and tariff regimes have introduced unpredictable cost fluctuations for cross-border cloud contracts. According to the Civo survey, more than three in five (over 60%) UK IT decision-makers say the British government should phase out its reliance on U.S. cloud services, citing both security and economic risks.For many organizations, these market uncertainties challenge the foundational promise of public cloud computing—predictable cost, elastic resource allocation, and freedom from capital expenditure. When tariffs or regulatory shifts can radically alter service pricing overnight, long-term IT planning becomes a minefield. While cost has always played a pivotal role in cloud procurement decisions, its significance is magnified when it is tied not just to technical efficiency but also geopolitical volatility.
Cloud Repatriation: Rediscovering Control and Compliance
Cloud repatriation—the migration of workloads from public cloud platforms back to on-premises or private environments—marks a profound philosophical reversal for the tech industry. After years of “cloud-first” evangelism, a surprising number of enterprises are pulling back, seeking to regain granular control over their data, optimize for regulatory alignment, and mitigate exposure to unpredictable vendor pricing or policy changes.Sources outside the TechRadar report corroborate these findings. For example, Gartner analysts have noted a similar uptick in repatriation consideration, especially among financial, healthcare, and public sector organizations operating in highly regulated industries. The drivers are not purely defensive: some businesses report improved performance, cost savings, and greater agility after rescinding from the cloud, as they fine-tune hybrid or local architectures tailored to their unique requirements.
Nonetheless, repatriation is not a panacea. Transitioning out of cloud platforms demands significant technical planning, investment in local infrastructure, and new management capabilities. Some observers caution that the term itself may overstate the reality—many “repatriation” projects lead to hybrid or multi-cloud arrangements, rather than full abandonment of external infrastructure. Regardless, the shift signals that blind reliance on any single vendor or geography carries new risks.
Big Tech and the Challenge of Trust
Trust in cloud service providers is built on three pillars: transparency, security, and demonstrable accountability. Civo’s report claims just over a third (36.6%) of organizations now trust large U.S. AI and cloud firms to handle their data appropriately. This lack of confidence is a warning sign for the industry’s incumbents, whose business models often depend on global data portability and broad-based user uptake.A key failing cited by survey respondents is the lack of visibility into how, where, and why data is stored and processed. While U.S. cloud providers have taken steps to localize services—such as building regional data centers and offering geo-fencing capabilities—these measures are often seen as reactive and insufficient. Critics argue that ultimate control remains elusive as long as parent companies remain subject to extraterritorial U.S. legal statutes, such as the CLOUD Act, raising the specter of compelled data access regardless of local privacy commitments.
“We’re seeing Europe lead the way in sovereignty initiatives,” said Mark Boost, urging UK policymakers to match the regulatory ambition and investment of their continental peers. The point is salient: the quest for technological sovereignty is not just about compliance, but also about enabling innovation and strengthening domestic technology ecosystems.
Shifting Regulatory Landscape: Opportunity and Obligation
The rush to assert digital sovereignty is most pronounced in Europe, but it is not unique to the region. France's “Gaia-X” initiative, Germany’s “Bundescloud,” and the European Data Protection Supervisor’s push for public-sector-specific clouds all exemplify the drive to support homegrown solutions and reduce dependency on foreign tech infrastructure.United Kingdom policymakers, for their part, face a balancing act. Cutting ties with U.S. providers too abruptly could stifle innovation and raise costs. Yet, failing to secure national control over sensitive data may risk breaches, government overreach, or exposure to foreign surveillance. Many experts advocate for a hybrid strategy: one that encourages domestic competition, enforces robust privacy standards, but allows organizations to leverage foreign capacity when necessary—provided stringent contractual and technological safeguards are in place.
The AI Angle: Data, Ethics, and Emerging Risks
The transition toward greater data sovereignty is not only a question of storage and jurisdiction—it also bears directly on the development and deployment of artificial intelligence. AI models are famously data-intensive, and their efficacy depends on access to large, diverse, and often sensitive datasets. In an era where data residency rules are tightening, non-U.S. organizations are weighing whether to entrust their intellectual property and proprietary information to cloud-based AI tools provided by U.S. firms.This skepticism is not unfounded. Several high-profile controversies have highlighted the risks of “data leakage,” model inversion, or unanticipated reuse of business data to train general-purpose AI systems. European and UK regulators are already drafting and enforcing AI-specific guidelines (such as the EU AI Act) that will intensify scrutiny of cross-border data transfers and algorithmic transparency. For organizations invested in AI, the calculus is complex: the allure of powerful off-the-shelf models must be weighed against potential intellectual property loss, legal exposure, and regulatory non-compliance.
Strengths and Weaknesses of Non-U.S. Cloud Strategies
Strengths
- Enhanced Compliance: Organizations operating within domestic or EU-based cloud frameworks benefit from clearer regulatory alignment and reduced exposure to extraterritorial law enforcement.
- Data Residency Guarantees: Granular control over where data is stored and processed minimizes risk and facilitates sector-specific requirements, such as those governing healthcare or financial services.
- Resilience and Autonomy: Reducing dependency on global giants insulates organizations from trade tensions, currency fluctuations, and abrupt pricing or policy changes.
- Innovation and Local Ecosystem Growth: Strengthening domestic cloud providers can foster competition and create an environment conducive to innovation, security research, and the employment of local tech talent.
Weaknesses
- Potential Cost Increases: Smaller, regional cloud providers may lack the economies of scale and engineering resources of hyperscalers, resulting in higher costs or reduced service breadth.
- Resource Fragmentation: A fragmented infrastructure landscape could complicate interoperability, especially for multinational organizations or those reliant on integrated SaaS ecosystems.
- Transitional Complexity: Migrating to new platforms or rearchitecting for hybrid environments entails significant costs, knowledge gaps, and operational risks.
- Global Collaboration Barriers: Repatriation and sovereignty restrictions could hamper seamless collaboration for globally dispersed enterprises or cross-border research endeavors.
Industry Outlook: Pragmatism over Ideology
While the rhetoric of digital sovereignty and structural independence is often couched in urgent or nationalistic terms, most industry analysts believe the future will be defined by pragmatic, hybrid strategies. Pure repatriation is likely to be the exception rather than the rule; instead, organizations will increasingly adopt multi-cloud and hybrid cloud architectures, leveraging both domestic and international providers as dictated by risk tolerances, budget constraints, and specific compliance needs.Cloud computing’s “original sin”—the concentration of control among a handful of U.S. corporations—remains difficult to fully redress. However, the move toward diversified, sovereign cloud strategies represents a maturing of the sector and a recognition that trust, transparency, and compliance cannot be retrofitted as afterthoughts.
Conclusion: A Defining Juncture for Global Cloud Adoption
For non-U.S. businesses, especially those in the UK and Europe, the days of uncritical reliance on U.S. cloud providers appear to be waning. Data sovereignty, regulatory risk, and economic volatility are now paramount, and the “cloud” has become both a battleground and a bellwether for broader debates over digital autonomy, ethical AI, and cross-border trade.Industry leaders and policymakers face complex choices. Move too slowly, and they risk losing control of critical infrastructure and strategic assets. Move too quickly or too parochially, and they could miss out on global innovation and scale.
The coming years will likely see a nuanced transition: more organizations negotiating bespoke data arrangements with providers, policymakers setting firmer rules for foreign service procurement, and a wider range of options for organizations prioritizing privacy and resilience above all else.
As concerns mount over cloud repatriation, data sovereignty, and the risks of hyperscaler dependency, the competitive landscape continues to evolve. Navigating this new terrain will require a keen understanding of the interplay between technology, law, and global economics—along with the ability to adapt as the cloud, and the world, keep changing.
Source: TechRadar Non-US businesses want to cut back on using US cloud systems
