SAP Unveils New Strategy for European AI and Cloud Sovereignty

SAP is accelerating its European‑focused cloud strategy with the launch of EU AI Cloud, a unified offering that consolidates the company’s previous sovereignty initiatives. The core objective is straightforward: give European organisations greater choice and tighter control over how they deploy AI and cloud services.

Some customers will opt for SAP‑operated data centres, others will rely on vetted European providers, while a third segment prefers fully on‑premise installations. EU AI Cloud is designed to accommodate all three scenarios, ensuring that data remains within the region and complies with EU regulations.

Strengthening AI sovereignty across Europe

In parallel, SAP has teamed up with Cohere to make next‑generation agent‑style and multimodal AI models available through Cohere North. These models are integrated into the SAP Business Technology Platform (SAP BTP), giving highly regulated industries a pathway to embed production‑ready AI into daily workflows without sacrificing data residency.

The partnership is positioned as a way for enterprises to extract deeper insights, enhance decision‑making and automate complex processes while retaining full compliance and performance control. Cohere’s own statements underscore the goal of keeping cutting‑edge AI accessible to organisations that cannot move data beyond Europe’s borders.

EU AI Cloud is being built with a broad ecosystem of European and global partners. Models and applications from Cohere, Mistral AI, OpenAI and others are embedded directly into SAP BTP, offering a clear route for customers to develop, launch and scale AI solutions. Partners’ tools are accessible as SaaS, PaaS or IaaS, and users can decide whether to run them on SAP’s infrastructure or on approved European clouds.

The overarching aim is to provide enterprises and public‑sector bodies with modern AI capabilities while staying firmly within European standards for security, data protection and sovereignty.

Deployment choices tied to different security needs

EU AI Cloud operates on SAP Sovereign Cloud, a framework that lets customers select the level of control they require across the entire stack—from bare‑metal infrastructure to application services. AI workloads run on SAP’s cloud infrastructure and SAP BTP inside European data centres, keeping operations separate from U.S. hyperscalers.

Key deployment options include:

• SAP Sovereign Cloud on SAP Cloud Infrastructure (EU) – An IaaS offering built on open‑source technologies that resides exclusively within SAP’s European data‑centre network, ensuring compliance with regional data‑privacy rules.
• SAP Sovereign Cloud On‑Site – SAP manages the infrastructure, but it is hosted in a customer‑selected data centre, delivering the highest degree of data, operational and legal control while still leveraging SAP’s cloud architecture.
• Selected hyperscalers by market – For customers that continue to run SAP commercial SaaS on global cloud platforms, sovereignty extensions can be applied to meet specific regional requirements.

One notable implementation is a sovereign cloud service tailored for the German public sector, built to align with local regulations and help government agencies modernise their digital infrastructure.

EU AI Cloud therefore expands the toolbox for European organisations, offering a mix of deployment models, partner‑sourced AI assets and a sovereign‑by‑design architecture that addresses stringent privacy, storage and operational oversight mandates.

From a business perspective, SAP’s move signals a strategic bet on data‑sovereignty as a differentiator in the highly competitive cloud market. By providing a European‑centric alternative to the dominant U.S. players—Microsoft Azure, Amazon Web Services and Google Cloud—SAP aims to capture enterprises that are increasingly wary of regulatory risk and geopolitical pressures.

Technologically, the integration of third‑party foundation models into SAP BTP creates a hybrid AI ecosystem that blends proprietary SAP services with open‑source and external AI innovations. This approach could accelerate time‑to‑value for customers while mitigating vendor lock‑in, a critical factor for firms operating under strict compliance regimes such, healthcare and public administration.

Analysts predict that SAP’s sovereign cloud could attract a sizeable share of the EU’s projected €30 billion AI‑cloud spend over the next five years, provided the company can demonstrate robust performance, seamless interoperability and transparent governance.