In 2026, digital sovereignty has moved from EU policy papers into the day‑to‑day decisions of DPOs, CTOs and CISOs. At the very moment when your organisation is sharing its most sensitive information – during an M&A deal, asset sale, refinancing or fundraising – you need to ask the simple question: is the platform that stores and processes your data and the company behind it fully and exclusively subject to European jurisdiction?
This article explains what digital sovereignty really means, why it matters for transactions, and how to factor it into your next choice of deal platform.
1. What is digital sovereignty?
Digital sovereignty is the ability of individuals, companies, and states to act, develop, and make independent, self-determined decisions in the digital world, rather than depending on foreign providers. Most definitions of digital sovereignty can get very abstract, but for dealmakers and security leaders it boils down to three questions.
- Data sovereignty – Who can access your data, under which laws, and where is it stored and processed?
- Infrastructure sovereignty – Who owns and operates the underlying infrastructure (data centres, cloud stacks), and which jurisdiction can compel them to act?
- Technology sovereignty – Who develops and controls the software and AI processing your data, and are there external services or models you cannot fully see or govern?
Crucially, these questions always apply to both the technology and the legal entity operating it: a platform can sit in an EU data centre, yet still be controlled by a non‑European company that is subject to foreign law.
Digital sovereignty in 2026 means being able to answer these questions credibly—not just for your core IT landscape, but also for specialist tools like the platforms you use for due diligence, Q&A, document review and deal collaboration. This is not just a theoretical distinction. A recent case in France shows what happens when platform origin and jurisdiction collide with sovereignty expectations.
A recent reminder from the French Senate
The sovereignty tension is not theoretical. In June 2025, during a hearing of the French Senate’s commission of inquiry on public procurement, the head of legal and public affairs at Microsoft France acknowledged that the company could not guarantee that data stored in France would be shielded from US judicial requests. When asked whether Microsoft would ultimately hand over data hosted in France if ordered to do so by an American judge, he confirmed that the company would comply once all internal review steps were exhausted.
This admission underlines how the CLOUD Act follows the provider rather than the server location, and why relying on US‑controlled cloud stacks for sensitive workloads such as health data platforms or “trusted cloud” initiatives has become so controversial in France. For private M&A, real estate and financing deals, the same logic applies: if the platform is subject to non‑EU law, “EU‑hosted” alone does not deliver true digital sovereignty.
2. Why is digital sovereignty a priority in 2026?
Episodes like this are one reason digital sovereignty has moved to the top of the 2026 agenda for European policymakers and CIOs alike. Control over data, compute and cloud infrastructure is seen as essential for economic competitiveness, democratic resilience and geopolitical autonomy. The EU and industry associations highlight two structural problems:
- A handful of non‑European hyperscalers still control most of the EU cloud market (around two‑thirds by some estimates).
- Critical workloads—including public sector, financial services and strategic industries—often run on platforms governed by foreign law.
In response, we are seeing:
- Accelerating investment in “sovereign cloud” initiatives, with European sovereign cloud spend forecast to grow sharply over the next few years.
- Major US providers announcing EU‑sovereign cloud offerings operated by EU entities with stricter controls.
- Guidance telling CIOs and CISOs to treat sovereignty as part of digital resilience and cloud strategy rather than a niche compliance topic.
For transaction‑ and/or confidentiality-heavy sectors – M&A, real estate, private equity, banking, energy and even sectors like defense – this shift lands right where you store and share the most valuable information: your data room.
3. The legal backdrop: CLOUD Act, GDPR and Schrems II
A key reason sovereignty has become so urgent is the collision between European data protection rules and extra‑territorial foreign laws.
- The US CLOUD Act allows US authorities to compel providers under US jurisdiction to hand over data within their “possession, custody or control”, regardless of where that data is physically stored.
- GDPR (notably Article 48) and the CJEU’s Schrems II judgment set strict conditions on foreign access to EU personal data and highlighted concerns about disproportionate US surveillance powers.
In practice, this means that:
- Using a US‑headquartered, US‑controlled cloud or SaaS provider can create a structural tension: they may be obliged to respond to US orders, even for data held in EU data centres.
- “EU‑hosted” is no longer enough if the provider itself is not European or routes data through non‑European sub‑processors.
For high‑stakes deals involving confidential documentation and investor information, this is more than a theoretical concern. It affects the platforms you use to run due diligence, Q&A and post‑deal archiving.
4. Why this matters specifically for your next transaction
During a transaction, you are not just uploading PDFs; you are effectively exposing your own or your clients’ organisation’s most confidential information to a third‑party platform.
Typical workflows look like this.
- You centralise all due diligence materials in a data room on a deal platform – financials, contracts, regulatory and technical reports.
- Buyers, lenders, counsel and advisors collaborate, ask questions and leave notes.
- You may use integrated chat and collaboration tools to clarify issues and share links.
- At closing, you archive the “frozen” state of the data room for legal and regulatory purposes, either digitally or via a USB.
At each stage, sovereignty questions appear:
- Is your platform provider European-established and European-controlled, or are they exposed to extraterritorial legislation like the CLOUD Act, even if they advertise EU servers?
- Are your deal-related communications integrated in your data room platform or are you using tools that fall under non-European-jurisdictions and thereby introduce additional cross-border exposure?
- Is any AI used in search, translation or document analysis run by external providers or hyperscaler services you cannot fully audit?
If the honest answer is “we don’t know” or “yes, they are US‑based”, then your next transaction is likely to run through tools that do not align with the EU’s digital sovereignty direction. Drooms is a European platform that is developed fully in-house, making it the obvious choice for dealmakers seeking digital sovereignty.
5. Why platform origin now matters more than server location
For many years, the standard due diligence question was: “Are our servers in the EU?”. In 2026, while still relevant, it is no longer the decisive question. The more important one is: “Under whose laws does our platform actually operate?”.
Recent guidance and analysis on sovereign cloud consistently emphasise two operating models.
- A full EU isolation model, where the provider is fully EU‑owned, EU‑operated and governed solely by EU (or equivalent) law. Drooms is the prime example of the full EU isolation model.
- A guardrail sovereign model, where non‑EU cloud companies offer EU‑specific regions with extra controls, but still sit behind a non‑EU parent.
Both can play a role in your broader cloud strategy. For highly sensitive workloads like transaction platforms and data rooms, however, full EU isolation offers three advantages:
- No primary exposure to foreign surveillance or disclosure laws.
- Simpler legal analysis for DPOs and counsel: one primary legal regime instead of overlapping ones.
- Clearer signalling to regulators, investors and counterparties about your risk posture.
Server location remains important, but sovereignty in 2026 is fundamentally about platform origin, ownership structure and control over the technology stack – not just about the postal code of the data centre.
6. Practical steps: making digital sovereignty part of your deal playbook
If you are planning a transaction in the next 12–18 months, here are concrete steps to integrate digital sovereignty into your process.
6.1 Put sovereignty on the RFP and checklist
Add explicit questions for any data room or deal platform you consider.
- Where is your company headquartered, and under which jurisdictions do you fall?
- Are you owned or controlled by any non‑EU entity?
- Where are your primary and backup data centres? Who owns and operates them?
- Do you use any non‑European sub‑processors?
- How is your AI trained, and is the AI developed in-house?
- How do you handle government or law‑enforcement requests from outside the EU?
6.2 Treat AI as part of your sovereignty architecture
If you are starting to use AI for due diligence – whether via an AI Assistant built into your platform or external tools – treat it as part of your sovereignty posture, not an add‑on. Key questions:
- Where does the AI actually run (which cloud, which region)?
- Is any of your data sent to external models or used to train them?
- Can you show, if asked by a regulator or counterparty, that your AI‑enhanced due diligence still respects EU data protection and sovereignty standards?
In 2026, many organisations are realising that “AI everywhere” is incompatible with “control nowhere”. The winning model is AI that is developed in-house and lives inside a sovereign, well‑governed platform, like Drooms.
7. Looking ahead: 2026 as a turning point
Industry observers argue that 2026 will be a make‑or‑break year for Europe’s tech sovereignty ambitions, especially in cloud and AI. New EU initiatives such as a potential Cloud and AI Development Act, stricter procurement rules and sectoral regulations (DORA, NIS2, AI Act) will all push organisations to scrutinise their digital dependencies more closely.
For transaction‑heavy sectors, this is an opportunity rather than just a compliance burden:
- You can streamline your deal around a sovereign‑ready platform.
- You can reduce legal uncertainty and reputational risk linked to extra‑territorial access.
- You can communicate a stronger trust and governance story to investors, lenders and counterparties.
If you are serious about protecting your next transaction from foreign jurisdiction, there is only one direction to go: onto a European platform like Drooms.
