Nscale, the European hyperscaler engineered for AI, has released new research revealing a clear and growing consensus among business leaders that sovereign AI infrastructure is essential for the secure and compliant deployment of AI workloads.
The study found that 81% of UK decision-makers are very or somewhat concerned about the impact of non-EU data laws, such as the US PATRIOT Act, on the control and confidentiality of their AI systems and data. This concern is particularly strong among enterprise C-suite executives (93%) and AI start-up leaders (79%), highlighting the high stakes for organisations developing and deploying AI at scale.
These concerns are driven by specific risks: potential compliance issues with EU data protection regulations, including GDPR and the EU AI Act (77%), the inability to guarantee long-term control over critical AI infrastructure (74%), and the risk of geopolitical instability or government interventions affecting data access and control (74%). These risks are making organisations carefully consider who they trust to handle their AI infrastructure.
Heightened trust in European providers reflects sovereignty priorities
Reflecting these concerns, trust in infrastructure providers is mixed but leans towards European players. While just over a third of respondents completely trust European sovereign cloud providers (36%) and US-based cloud service providers (CSP) (35%) to handle their AI data securely and in line with regulations, a significant proportion feel less reassured. In fact, a fifth (20%) state they have “no trust” in US-based cloud providers today. In-house and on-premise solutions top the trust scale with 47% having “complete trust” in them, demonstrating the premium organisations place on direct control and regulatory alignment.
This divergence in trust levels reinforces why 50% of UK decision-makers view sovereign AI infrastructure as a major competitive differentiator over the next two years, offering compliance, greater trust but also a competitive advantage when it comes to market positioning.
When choosing an AI infrastructure partner, over 90% of respondents rate performance and speed, security, data sovereignty, and cost-effectiveness as important. However, what drives those choices varies across roles:
• Start-ups emphasise security (97%), performance (96%), and cost (97%).
• Enterprise C-suites prioritise scalability (98%), transparency (97%), and performance (97%).
• IT directors focus on performance (100%), security (99%), and customer support (99%).
• AI and ML developers and engineers highlight security (97%), transparency (95%), and cost (95%).
• Risk and compliance leaders rate performance (97%), energy sourcing and sustainability (96%), and security highly (96%).
Perception gaps highlight need for internal alignment
Despite broad agreement on the importance of sovereignty, the research reveals a notable gap in perception within organisations. While 46% of AI start-up C-suites, 57% of enterprise C-suites, and 57% of IT directors and managers see sovereignty as a major strategic priority, only 35% of developers share this view. This divergence underscores the need for increased internal dialogue to better align strategic goals with technical perspectives around the benefits and perceived risks of sovereign AI infrastructure.
Perceptions of transparency around data processing also vary. Over half (54%) of UK respondents say their cloud or AI infrastructure provider is very transparent. Confidence is highest among enterprise IT directors and managers (99%), reflecting their operational roles, and strong among start-up C-suites (97%). Yet, 8% of enterprise developers remain sceptical about provider transparency.
Client expectations are another driver behind the shift to sovereignty: half (50%) of organisations report strong demand from their customers and partners for AI systems to be hosted on sovereign infrastructure. This signals a clear market move toward sovereign solutions as an imperative for not only compliance but also brand reputation and trustworthiness.
Karl Havard, Chief Commercial Officer at Nscale, said: "Sovereignty is often misunderstood and frequently reduced down to a discussion about where data is stored. Yet true sovereignty encompasses full ownership, operational control, regulatory compliance, and transparency throughout the entire AI infrastructure stack.
“Importantly, sovereignty also ensures that the value generated by AI remains within the communities and countries where the infrastructure and AI talent resides, supporting local economies and innovation ecosystems.
“As AI takes centre stage in business strategy, this research highlights the extent to which sovereignty has moved beyond compliance. It’s becoming a cornerstone of trust, resilience, and sustained innovation. While US Big Tech companies continue to expand their presence across Europe’s AI landscape, European providers must elevate their offerings to deliver truly sovereign, transparent, and future-ready infrastructure that safeguards sensitive data and intellectual property in an increasingly complex geopolitical environment.”
