What will be the combined market share (%) of EU-headquartered cloud providers in the EU public cloud infrastructure (IaaS+PaaS) market at the end of 2029?

The most predictive anchor for this estimate is the remarkable stability of the current market structure. Synergy Research Group data shows that EU-headquartered cloud providers' share of their home market fell from 29% in 2017 to roughly 15% in 2022, but has held nearly flat through 2024 srgresearch.com. Meanwhile, the three major US hyperscalers (AWS, Microsoft Azure, Google Cloud) hold over 70% of the market. The central tension shaping the 2029 outlook is the collision of two massive forces: aggressive new EU digital sovereignty policies versus the structural scale and AI advantages of US hyperscalers. These forces currently roughly cancel each other out, anchoring the median near 15.4%.

Tailwinds: Policy and Sovereign Demand The primary driver for upward movement is policy-induced demand. The EU Cloud and AI Development Act (CADA), proposed in June 2026, aims to triple EU data-center capacity over the next 5–7 years eur-lex.europa.eu. CADA introduces a strict four-level sovereignty framework, where Level 3 requires providers to be 'owned and controlled from the EU' and Level 4 demands 'no interference from a third country' 2 sources. This framework effectively tilts lucrative, sensitive public-sector procurement toward local providers, reinforcing precedents seen in the Commission’s recent €180M sovereign-cloud tender 2 sources. The demand signal is genuine: Gartner projects European sovereign cloud IaaS spending will surge 83% to $12.6bn in 2026 and reach $23.1bn by 2027 2 sources. Additionally, the EU Data Act is expected to reduce switching and egress frictions by 2027, moderately lowering barriers for local adoption one.oecd.org.

Headwinds and Structural Constraints Despite the strong policy push, several structural constraints heavily limit the upside, preventing a return to the 2017 market share of 29%:

1. The Denominator Effect & Capex Dominance: The overall market is expanding incredibly fast. US hyperscalers invest roughly €10bn per quarter in European capex, establishing an 'impossible hill to climb' for local challengers operating at a fraction of that scale 3 sources. EU providers must achieve breakneck growth simply to maintain their current 15% slice.
2. AI and Infrastructure Scarcity: Tripling data-center capacity requires an estimated €200bn in largely private investment and faces acute bottlenecks in grid power and GPU supply fierce-network.com. Deep-pocketed hyperscalers are vastly better positioned to secure scarce AI compute resources.
3. Leakage to Global Providers: 'Sovereign cloud' spending does not strictly equate to 'EU-headquartered' revenue. Gartner notes that 80% of new sovereign spending represents new or modernized solutions rather than workloads shifting from global to local providers datacenterdynamics.com. US hyperscalers are highly adept at capturing this demand through their own localized, high-assurance 'sovereign' offerings.
4. Implementation Lags: CADA faces significant industry pushback, with groups calling the rules discriminatory and unworkable 2 sources. Normal legislative and negotiation delays mean any procurement mandates will likely only phase in around 2027, yielding only a partial market impact by Q4 2029.

Conclusion and Distribution The median estimate of 15.37% reflects the baseline assumption that EU providers will successfully ride the wave of sovereign demand and regulatory support just enough to keep pace with the massive overall market expansion, but will lack the structural scale to reclaim significant share from US hyperscalers. The distribution features a moderate right skew (75th percentile 17.87%, 90th percentile 21.0%) to account for scenarios where CADA is aggressively enacted without dilution, triggering a faster-than-expected migration of regulated enterprise workloads to EU-headquartered firms. Conversely, the downside risk (10th percentile 11.93%) accounts for a scenario where hyperscalers use their AI-compute dominance to accelerate overall market growth, effectively outpacing local EU sovereignty efforts.