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Home PRIVATE EQUITY

Europe’s AI cloud startups chase megarounds as Trump brings security fears into focus

Siftedby Sifted
May 2, 2025
Reading Time: 4 mins read
in PRIVATE EQUITY, UK&IRELAND, VENTURE CAPITAL
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European AI cloud providers are pitching VCs for billions of euros of investment, tapping into growing calls for sovereignty on key tech infrastructure amid tensions with the US.

The cloud computing industry in Europe is dominated by a handful of hyperscalers based in the US, with AWS (Amazon Web Services), Microsoft Azure and Google Cloud controlling more than 70% of the market. 

But there are growing fears over Europe’s reliance on US-based providers following unprecedented decisions taken by president Donald Trump in recent weeks. Last month he sent global markets into meltdown after unveiling a sweeping package of tariffs. While they’ve since been reduced, it remains unclear if or when he will reinstate them. 

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Now Europe’s cloud providers are hoping to capitalise on that sentiment, with a handful of homegrown players in the space currently in the market for big money raises as they look to build out big money infrastructure projects.

London-based startup Ori is aiming to close a new round by the end of this year, having recently raised $140m. There are reports that compatriot Nscale is seeking $2.7bn in new funds, while Fluidstack, another UK startup, is chasing up to $200m.

Trump’s willingness to exploit allies’ weaknesses as leverage has supercharged questions over Europe’s reliance on the US in a wide range of areas, from military spending to cloud infrastructure. 

Since Trump returned to power, startups in the sector say concerns over European tech sovereignty have come to the fore in conversations with investors. 

“I know that some are fundraising or gearing up for a fundraise on the back of that,” says Tatiana Shalalvand, investment director at Kinnevik. “Some companies have been positioning themselves as European alternatives to US hyperscalers.”

Rising European cloud sector

As more and more companies enter the AI race, demand for high-performance compute has skyrocketed. European governments have likewise sought to secure commitments from businesses looking to build AI infrastructure. 

In January, the UK announced £14bn in data centre commitments as it unveiled its grand AI plan (of which £2.5bn was from Nscale). 

Meanwhile, France said it had secured more than €100bn for a similar scheme. As part of that project, both homegrown AI darling Mistral and Swedish cloud startup Evroc agreed to build AI data centres in the country.

There are worries that Trump’s tariffs could spark a hike in prices at US-based cloud providers, as components for their data centres become more expensive, alongside fears that access to foreign users could be limited.

Some of the industry’s biggest players are increasingly aware of European customer anxieties. 

On Wednesday, Microsoft said it would take legal action if the US government blocked access to its services in the region and said it expected to spend “tens of billions of dollars” a year on European data centres.

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The same day, Business Insider published details of an internal AWS memo, in which company leaders acknowledged concerns Trump could squeeze foreign nation’s cloud access, but said they had “heard nothing” directly from the White House on the matter.

Sifted approached Amazon, Google Cloud and Microsoft for comment.

European players providing more traditional cloud services say they’re seeing increased demand from consumers.

“Since the election we have seen a significantly increased demand in sovereign European Cloud solutions like IONOS and other companies provide,” says German cloud provider Ionos.

“Looking at what happened in the US in the past three months, more and more companies are afraid that in spite of alleged precautions US authorities — or even private companies — may access customer data stored on servers under the US jurisdiction.” 

While many European AI cloud providers were playing up the tech sovereignty angle before Trump entered office, Fluidstack is pushing it more in conversations with investors in 2025, says president and cofounder César Maklary.

“Sovereignty is coming up more often in the market, particularly in Europe,” he tells Sifted. “We’re seeing increased demand from labs and enterprises looking for European infrastructure they can trust.”

Read the orginal article: https://sifted.eu/articles/european-cloud-startups-trump/

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