Maintaining strict control over cloud data and operations is now critical for governments, public institutions, and businesses, as they navigate new regulations, higher resilience standards, and rapid technological change.
In June 2025, Microsoft CEO Satya Nadella introduced new solutions to address these needs through the Microsoft Sovereign Cloud, enabling customers to gain greater control, security, and compliance when using cloud services.
We are always improving our approach to sovereignty, ensuring we meet customer needs and comply with regulations across both our sovereign public and private clouds. Today, we are sharing new features that build on our digital sovereignty controls, offering advanced AI and greater scale supported by our network of local partner experts, so customers can more confidently manage sensitive data and drive innovation. The new features and services include:
- End-to-end AI data processing in Europe as part of the EU (European Union) Data Boundary, which is a Microsoft framework ensuring all customer data stays within EU borders for compliance and privacy.
- Microsoft 365 Copilot now offers in-country data processing for interactions in 15 countries.
- Sovereign Landing Zones—pre-configured, secure cloud environments meeting strict local regulations—and disconnected operations, where cloud functions run without connection to external networks, are now available for Azure Local, Microsoft’s in-country cloud service.
- Microsoft 365 Local is now generally available.
- Azure Local, Microsoft’s regionally hosted cloud, now supports external SAN (storage area network—a high-speed storage solution connected to multiple computers) storage and the latest NVIDIA GPUs (graphics processing units used to accelerate AI tasks).
- Digital sovereignty specialization—a program that certifies partners to design and implement solutions keeping data under strict regulatory controls in specific regions—is now available through Microsoft partners.
Microsoft Sovereign Cloud: Continuous Innovation
The latest updates introduce new digital sovereignty features in AI, security, and productivity. More features to meet sovereign cloud needs are coming soon.
We know constant innovation is important, and we have already started putting many of our promises into action to deliver tangible benefits such as improved efficiency and customer satisfaction. As of this month:
- Established a European board of directors composed of European nationals exclusively overseeing all data center operations in compliance with European law. This ensures that local governance and oversight enhance data protection and customer trust.
- We launched additional European data centers in Austria and will launch one in Belgium this month, boosting regional performance and reliability.
- Embed our digital resiliency commitments into all government contracts, ensuring customers benefit from stronger guarantees around service continuity and security.
- Expanded open source investments by funding secure OSS projects and alliances, and publishing AI access principles. These efforts provide safer, responsible access to advanced AI, enabling European developers, startups, and enterprises to innovate, collaborate, and compete more effectively across the region.
- Advance our European security program by providing AI-powered intelligence and cybersecurity capacity-building initiatives to strengthen your country’s digital resilience against threat actors.
New Sovereign Public Cloud And AI Capabilities
When organizations start planning for sovereignty, they need complete solutions that help them embed compliance and control from the beginning, ensuring their data processes and workloads are protected in accordance with local regulations.
EU Data Boundary Includes AI Data Processing Residency
Microsoft is fulfilling its commitment to end AI data processing outside the EU. Data handled by AI services for EU customers remains within the European Union data boundary unless customers specifically request otherwise. This approach ensures compliance with EU regulations and enhances confidence in data privacy.
All customer data, whether stored or in transit, will be kept and processed solely within the EU. This provides organizations with clear assurance of data residency and helps meet legal requirements. Strict controls and transparent processes are used to address EU customer requirements.
Expanding Microsoft 365 in Country Data Processing to 15 Countries
After years of investing in global infrastructure and strong data residency, Microsoft will now provide in-country data processing for Microsoft 3.co-pilot interactions in 15 countries worldwide, so customers can meet local regulations and enhance data privacy.
By the end of 2025, customers in Australia, India, Japan, and the UK can have Copilot interactions processed in-country, supporting compliance and control. In 2026, the option extends to 11 more countries, including Canada, Germany, Italy, Malaysia, Poland, South Africa, Spain, Sweden, Switzerland, the UAE, and the US.
New Sovereign Landing Zone (SLZ) Foundation
We are rolling out an updated sovereign landing zone (SLZ), a set of cloud resources and settings designed for security and compliance, built on the trusted Azure landing zone (ALZ) framework — Microsoft’s best practices for organizing cloud environments.
The sovereign landing zone is our recommended platform for customers who need to set up sovereign controls – or specific measures to ensure compliance with national or regional requirements – in the Azure public cloud as part of the broader sovereign public cloud offering.
The refresh of the sovereign landing zone includes:
- We’ve updated the management group hierarchy, which organizes resources in Azure, and added new Azure policy definitions (rules for resource behavior), initiatives (collections of policies), and assignments (applications of policies) to help you implement sovereign public cloud controls at levels 1, 2, and 3 – these levels correspond to two different degrees of regulatory requirements.
- Guidance is now available on where to deploy Azure Key Vault Management HSM—a cloud-based hardware security module for storing and managing encryption keys—for those requiring level two sovereign controls.
- Deployment is now easier with the Azure Landing Cloud Accelerator (a set of automation tools) and the Azure landing zone library (a collection of pre-configured architectures). For more details, check out the sovereign landing zone (SLZ) implementation options.
In the coming months, we’ll keep adding more Azure policy definitions, initiatives, and assignments to the sovereign landing zone. This will help you achieve sovereign control in the public cloud even faster, right out of the box.
Sovereign landing zones provide a clear architecture to accelerate compliance with sovereignty rules, simplify policy management, and enable scalable design. Distant operations across Azure regions
New Sovereign Private Cloud and AI Capabilities
As organizations increase focus on sovereignty, balancing regulatory compliance with innovation is essential. The latest updates combine advanced AI features and scalable infrastructure for both public and private environments.
Supporting Thousands of AI Models on Azure Local with NVIDIA RTX GPUs
We’re expanding our sovereign private cloud with Azure Local, introducing a new Azure offering featuring the latest Nvidia RTX Pro 6 Blackwell Server Edition GPU, built for high-performance AI workloads in sovereign environments.
This GPU can run over 1,000 AI models, including GPT OSS (an open-source generative pre-trained transformer), DeepSeek v3 (a language model), Mistral, Nemo (a conversational AI model), and Llama for Maverick (a large language model). It speeds up AI projects in a sovereign private cloud, letting organizations experiment, innovate, and deploy advanced AI solutions securely and compliantly.
You’ll have access to thousands of pre-built and open-source AI models for tasks such as generative AI analytics and real-time decision-making problems. Providing the tools for innovation with governance at the forefront.
Increasing Azure Local To Scale Hundreds Of Servers.
Previously, Azure Local supported clusters of up to 16 physical servers (individual computers connected in a group for shared processing and storage). With our latest updates, Azure Local can now handle hundreds of servers. DSOF opens up new options for organizations with large or growing private cloud needs (private computing environments used by a single organization). You can now run larger workloads (the computing tasks or applications your organization runs). Scale your infrastructure easily and keep up with business changes, all while meeting European and global security and sovereignty standards (regulations that ensure your data stays protected and within certain regions).
SAN Supported on Azure Local
One major update is the addition of support for storage area networks (SANs) on Azure Local. ASAN is a high-speed network that connects storage devices to servers. Now you can securely connect your existing on-premise storage to Azure Local. This lets you use your current storage investments while leveraging cloud services, helping keep your data in the right location for European businesses. This means greater flexibility to comply with local data residency requirements without sacrificing performance or control.
Microsoft 365 Local: General Availability of Key Workloads
Microsoft 365 Local is now available, bringing Exchange, SharePoint, and Skype for Business to Azure Local. Deploy in connected mode now; a fully disconnected option will be available in early 2026, ensuring compliance and centralized management.
Disconnected Operations: General Availability
Microsoft’s sovereign private cloud brings the principles of data sovereignty — such as local data control and legal compliance — to two dedicated environments with Azure local. This allows government agencies, multinational companies, and regulated organizations to keep their data within local jurisdictions while still benefiting from Microsoft’s global cloud scale and innovation.
We’re preparing to launch disconnect operations for Azure Local, enabling you to manage clusters from a single control plane. This feature, in early 2026, enables secure, independent cloud operations in regulated or remote scenarios.
New Partner Digital Sovereignty Specialization Now Available.
We are pleased to announce the launch of the Digital Sovereignty specialization in the Microsoft AI Cloud Partner Program. This new specialization lets partners show their expertise in delivering secure, compliant, and sovereign cloud solutions on Azure and Microsoft. Sovereign cloud solutions are cloud services that help organizations keep their data within defined boundaries and comply with local government policies. Earning this designation proves that partners can meet stringent data residency (storing data in a particular location), privacy, and regulatory standards, helping customers maintain control over their apps and data while innovating. The specialization includes a thorough audit and offers benefits such as improved visibility, special badges, and priority access to sovereign cloud opportunities.
Gazing Forward: Advancing Sovereignty Through Greater Controls
Going forward, the Microsoft Sovereign Cloud Roadmap will add more features to meet changing customer needs:
Sovereign Public Cloud
- Data Guardian: This new feature will give you greater transparency into operational sovereignty controls (measures that ensure compliance and control) in our European public cloud. Any remote access by Microsoft engineers to your data systems in Europe will go through the EU, where an EU-based operator can monitor and, if needed, stop these activities. All remote access will be recorded in a tamper-evident log — a secure record that cannot be altered without detection.
Sovereign Private Cloud
- Enhanced change controls will add configurable policies and approval workflows (steps for reviewing and approving changes), giving organizations clear oversight of any changes from the cloud to the edge (devices and resources outside central data centers). This will strengthen governance and compliance.
- Site-to-site disaster recovery: Azure Site Recovery in Azure Stack will help keep your business apps and workloads running during outages, supporting business continuity.
- Move from hybrid to fully disconnected: Azure Local lets you migrate workloads from hybrid to fully disconnected environments, giving you greater flexibility for business continuity.
National Partner Clouds
National Partner Clouds are key to our sovereign cloud strategy, delivering independently operated Microsoft Azure and Microsoft 365 under local control.
- Delos Cloud is designed to meet the German government’s BSI cloud platform requirements.
- Bleu is designed to meet the French government’s (ANSSI) SecNumCloud requirements.
For many public sector organizations, ERP is a key workload that needs to move to the cloud. SAP plans to offer its RISE vision. SAP solution on Microsoft Azure for both Bleu and Delos cloud customers, as well as for those using Microsoft Azure Public Cloud.
Learn More About Microsoft’s Sovereign Solutions
Microsoft offers sovereign solutions, including a flexible public cloud, scalable private cloud, and national partner clouds for specific compliance needs—supporting you in meeting sovereignty requirements through continued innovation.
See what’s coming in cloud innovation this November at Microsoft Ignite. Learn more and sign up today.
Source: Microsoft strengthens sovereign cloud capabilities with new services
