Cloud sovereignty with Oracle

Artificial intelligence is transforming the way we work, but as AI adoption accelerates, so do the expectations around security, compliance, and data sovereignty. Forward-looking governments and businesses across Europe, the UK, and the Middle East understand that to realise AI’s full potential, trust must be built in from the start.

Between 2018 and 2024, the European Union (EU), United Kingdom and Ireland (UKI), and several Middle Eastern nations introduced robust data protection laws and governance frameworks to enhance security, reduce foreign dependency and drive digital autonomy.

To adapt to these regulations, many organisations are turning to sovereign cloud—a secure, localised infrastructure that supports innovation on their own terms. At PwC and Oracle, we’re working together to help public and private organisations navigate this shift with confidence.

Sovereign cloud 101

Sovereign cloud is a model in which cloud infrastructure and services are hosted within a defined jurisdiction, giving governments and businesses full control over their data. For regions like the EU, UKI, and the Middle East, this approach helps organisations:

Comply with strict local regulations
Address national security concerns
Safeguard critical data

The EU AI Act, which took effect in August 2024, sets clear expectations: AI must be safe, ethical, and transparent. It introduces a risk-based framework, categorising AI systems as prohibited, high-risk, or limited-risk. High-risk systems (e.g., those used in employment or infrastructure) must meet rigorous requirements around data quality, transparency, and oversight.

As this PwC report points out, the Act adopts a risk-based approach, categorizing AI applications into prohibited, high-risk, and limited-risk tiers. Prohibited AI systems include those that manipulate human behavior or exploit vulnerabilities, while high-risk systems, such as those used in critical infrastructure or employment, are subject to stringent requirements like risk assessments, data governance, and human oversight.

According to the EU AI Act, the General Data Protection Regulation (GDPR)Opens in a new window, and other national frameworks, European public and private sector institutions must ensure that data processing, storage, and AI model training occur within borders and under European legal oversight.

Non-compliance can result in substantial fines, up to €35 million or 7% of global annual turnover. And crucially, these rules apply to any provider or user of AI systems operating in the EU—regardless of where they’re based.

This means public institutions and global businesses alike must ensure AI systems and data remain within EU borders and under European legal jurisdiction.

Different regions. Different rules.

While the need for sovereignty is universal, regulatory approaches vary. The EU prioritised autonomy and GDPR compliance. The UK’s post-Brexit model introduced UK GDPR with slightly divergent rules. Meanwhile, many Middle Eastern countries mandate in-country data hosting and often require partnerships with local cloud operators.

Each region demands a tailored response.

Key concern: Post-Brexit autonomy
Data residency requirement: Strong preference
Foreign vendor restrictions: Moderate (focus on security)
Notable framework: UK GDPR (post-Brexit version of the EU GDPR); National Cyber Security Centre (NCSC) cloud security guidance; and Data Protection Act 2018
Sovereign cloud focus: Ensuring UK-based data storage and processing, particularly for public sector workloads; emphasis on critical national infrastructure (CNI) protection; vendors must comply with strict access control and transparency requirements

Key concern: Digital sovereignty
Data residency requirement: Required
Foreign vendor restrictions: Strong (avoid extraterritorial laws); strict rules on third-country data access
Notable framework: EU GDPR; EU Cybersecurity Act; NIS2 Directive; GAIA-X (pan-European cloud federation); and European Data Governance Act
Sovereign cloud focus: Focus on data localization, digital sovereignty, and vendor independence; preference for EU-owned and operated infrastructure; GAIA-X aims to establish federated cloud services with EU values of transparency, interoperability, and data control; emphasis on strategic autonomy, particularly in healthcare, defense and finance

Key concern: National control
Data residency requirement: National security strategies and local hosting are mandated
Foreign vendor restrictions: Often requires in-country data centres and local or joint-venture partner
Notable framework: Saudi Arabia’s Data Protection Law, UAE’s Data Protection Law; National Cybersecurity Strategies
Sovereign cloud focus: Emphasis on national security and digital self-reliance

High performance and autonomy

Having the infrastructure is only part of the solution. We help organisations put it to work—securely, efficiently and at scale.

We’re supporting governments, public agencies and enterprises across Europe and the Middle East to:

Assess AI readiness
Build data localisation and governance strategies
Design compliant AI use cases
Deploy sovereign solutions across finance, health, defence and more
Navigate evolving regulations with confidence

Oracle Cloud Infrastructure (OCI) Sovereign Cloud is built to support European needs:

Data residency: Workloads and data stay within designated borders
Operational autonomy: Managed by EU-based teams under EU law
Regulatory compliance: Built to meet GDPR, the EU AI Act, and country-specific rules
AI-ready infrastructure: Enables organisations to train and deploy AI while staying compliant

Sovereign AI means more than performance. It means meeting ethical, legal, and operational standards from day one.

With Oracle’s technology and PwC’s transformation knowledge, your organisation can unlock AI innovation while protecting sovereignty, enhancing resilience, and strengthening public trust.

Whether you’re a government agency or global enterprise, sovereign cloud is more than a compliance solution—it’s a launchpad for sustainable digital growth.

Let’s build your sovereign, secure AI future together. Contact us.