European organisations are entering the AI era with a built-in disadvantage. New research from Insight shows that cloud-first strategies have created a persistent efficiency tax, with organisations wasting an average of 24% of annual cloud capacity — capital that could otherwise fund sovereign, resilient infrastructure to support AI at scale.
Across EMEA, almost half of organisations spend up to €5 million annually on cloud services. For an organisation with an average cloud spend of €3.75 million, this equates to almost €901,000 in wasted spend each year, limiting investment in AI platforms, data sovereignty controls and long-term infrastructure resilience.
Defining the Digital Sovereignty Trilemma
These findings sit at the heart of Insight’s Digital Sovereignty Trilemma report — a research-led framework describing the three competing pressures organisations must balance as AI adoption accelerates:
Economic efficiency: With nearly a quarter of cloud capacity wasted, funding for high-cost AI innovation and advanced data platforms is being eroded.
Operational resilience: To guarantee availability, 47% of organisations over-provision infrastructure, embedding costly “just-in-case” architectures.
Data sovereignty: Increasing regulatory demands around data residency and AI governance are driving workloads towards dedicated or sovereign platforms, often forcing trade-offs between control, cost and performance.
What was once the accepted cost of cloud agility has become a structural constraint. AI alone is driving a 12% year-on-year increase in hosting costs, while 67% of organisations already view digital sovereignty as a critical strategic priority, rising to 82% within three years. However, over-provisioning (47%), limited visibility (47%) and inactive resources (46%) continue to inflate spend and restrict flexibility.
Gernot Hofstetter, Co-CEO of Yorizon, said: “Insight’s Digital Sovereignty Trilemma reflects the reality many European organisations now face: sovereignty, resilience and cost efficiency often pull in different directions. Without deliberate infrastructure design, organisations risk lock-in at a time when digital foundations are increasingly linked to economic and societal stability.”
Despite rising costs, 56% of organisations do not carry out total cost of ownership (TCO) assessments before major workload decisions, while 41% remain constrained by legacy applications, making it difficult to rebalance and optimise cloud estates.
Adrian Gregory, President of Insight EMEA, said: “Organisations are wasting nearly a quarter of their cloud capacity just as AI is pushing infrastructure costs sharply higher. To scale AI sustainably, infrastructure must be treated as a strategic asset — reducing waste, applying rigorous TCO discipline and deliberately balancing performance, sovereignty and long-term economic efficiency.”
As a result, organisations are increasingly adopting sovereignty-aware hybrid architectures, with 85% already evaluating or deploying dedicated infrastructure for AI. Insight’s research highlights a clear opportunity to reclaim wasted cloud spend by improving visibility, removing inactive resources and aligning cloud strategies with AI and sovereignty requirements.
In the UK, digital sovereignty is moving rapidly from consideration to expectation. Today, 78% of organisations say it is important, rising to 90% within the next one to two years and 94% longer term. As cloud estates expand and AI pushes infrastructure costs higher, UK organisations are increasingly reassessing workload placement to reduce waste while maintaining control, resilience and flexibility.
