Microsoft has announced plans to increase its data centre capacity in Europe by 40% over the next two years, as part of a broader initiative to reassure European customers amid rising concerns over data sovereignty and geopolitical tensions.
The announcement was made by Brad Smith, Microsoft’s Vice Chair and President, in a blog post addressing fears that recent actions by the U.S. government, including trade tariffs on the UK, could push European customers to shift away from American cloud providers.
“Given recent geopolitical volatility, we recognise that European governments likely will consider additional options,” Smith wrote. “Some of these may involve public financing to support European home-grown offerings. We recognise the importance of a diversified technology ecosystem, and we are committed to collaborating with European participants across the tech ecosystem.”
As part of its strategy, Microsoft said it would place oversight of its European data centre operations under a European board of directors made up exclusively of European nationals and governed by European law.
“In the unlikely event we are ever ordered by any government anywhere in the world to suspend or cease cloud operations in Europe, we are committing that Microsoft will promptly and vigorously contest such a measure using all legal avenues available, including by pursuing litigation in court,” Smith added.
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In a significant move, Microsoft will include a new European Digital Resilience Commitment in its contracts with national governments and the European Commission. This legally binding provision aims to ensure data security, sovereignty, and continuity of services in the region.
To further protect operational stability, the company plans to work closely with European partners, citing existing collaborations with Bleu in France and Delos in Germany. Microsoft also revealed plans to store backup copies of its core code in a secure Swiss repository, ensuring partners have the legal rights and technical means to maintain operations if required.
This European expansion comes as Microsoft reportedly pulls back from several U.S. data centre projects, raising speculation about a slowdown in its AI infrastructure growth. Industry analysts say the company has cancelled leases amounting to several hundred megawatts with at least two private data centre operators in the U.S., while also delaying some international investments.
