Undoubtedly, ESC is a sophisticated proposition—clearly the result of extensive thought, careful planning, and considerable groundwork, both operational and political. It is also important not to overlook the substantial capital and expertise cloud corporations bring to the table.
Let me begin with AWS’s corporate strategy. Creating a new “parent” company with Amazon as its own parent is reminiscent of the 1970s playbook for multinational corporations (MNCs), a frequent target of dependency theory at the time. Back then, MNCs set up local subsidiaries in both developed and developing economies, in compliance with local laws and regulations (when they existed) and, at least in theory, respecting national sovereignty. Most staff were not local, as expertise was imported when needed, and the primary focus was on selling tangible goods—banks and financial firms aside. Today’s digital MNCs no longer require this structure; their intangible services are instantly accessible to anyone with an internet connection. Still, holding legal representation in major markets helps them grow and lobby policymakers to their advantage.
In this respect, Amazon is borrowing a strategy from its older, analog counterparts—some of which remain active today. Yet, the crucial distinction lies in what is being sold. At the core of Amazon’s project is the commoditization of digital sovereignty: a critical intangible residing in the governance domain. Amazon’s framework appears capable of shaping the very idea of digital sovereignty—a notoriously slippery concept. Significantly, it offers tools for measuring, evaluating, and even steering sovereignty toward specific objectives. In effect, it crafts a fresh imaginary of digital sovereignty, one that could gain real traction in the daunting world of unpredictable politics and geopolitics, and the ever-expanding arena of profit-making. Perhaps that is why none of the numerous AWS and Amazon ESC documents attempt to define sovereignty outright. The target is to develop a refurbished concept rooted in practical realities that policymakers and consumers can readily understand and embrace, no questions asked. And the EU seems to be buying it wholesale.
Amazon is, in fact, privatizing yet another public good. From the perspective of nation-states, sovereignty is the supreme authority over territory and people. The ever-shifting dynamic between the people and the sovereign gives sovereignty its political and power-related texture, spanning from absolute monarchies and unrestrained autocrats to electoral and direct democracies. “Supreme” is not synonymous with “absolute”—sovereigns can and often do delegate authority, and the separation of powers brings essential checks and balances. Those steering the sovereign ship can be ousted if they fail or breach the social contract. In this light, sovereignty stands as a public good—non-rivalrous and non-excludable in the economic sense, but more deeply, as the living product of a nation’s ongoing collective interaction.
That said, in this case, a foreign private company (Amazon/AWS) has set up a local European subsidiary, ESC, to operate an isolated cloud partition that ostensibly meets EU digital sovereignty requirements. ESC already enjoys support from certain European governments and companies. In effect, some European sovereign states have delegated a measure of their cloud sovereignty to a private MNC, mediated by an entity run by EU nationals. The pivotal issue is that these states do not hold supreme authority over ESC; that rests with the MNC that owns and finances it. This arrangement introduces political and legal complexities, all the more pressing now that the global hegemon seems less inclined to play by established international rules.
How did Amazon pull this off? The answer is a dual-track strategy. First, they drew a sharp line between production and management—a division Amazon/AWS describes as “operational autonomy,” which, for all intents and purposes, is treated as a stand-in for sovereignty. Amazon retains full ownership over infrastructure, software, data, and applications: the entire means of production. ESC is permitted, even encouraged, to supervise and request changes to meet EU sovereignty requirements, but its authority remains limited—far from “supreme.” That remains the prerogative of Amazon’s executive leadership. Economically, Amazon pockets the profits and may even edge out regional competitors unable to match its scale or scope. In parallel, ESC’s existence could actually hinder the rise of a genuinely European cloud provider with global aspirations. Against this backdrop, it’s worth considering what the forthcoming EU Cloud and AI Development Act will mean for the landscape.
The second track bridges production and management. Amazon has assembled an extensive suite of technologies to enable this separation, integrating them into a unified platform. I’ve previously mentioned two, but the list is long: AWS Nitro, Amazon EC2, AWS Direct Connect, Amazon Route 53, AWS Artifact, Amazon Bedrock, Amazon Q, Amazon SageMaker, Amazon EKS & ECS, AWS Lambda, AWS Fargate, Amazon S3, Amazon EBS, Amazon RDS, Amazon Redshift, Amazon ElasticCache, Amazon VPC, Amazon ELB, AWS KMS, AWS Private CA, AWS Shield & WAF, and more. Many of these are established services, but will be tailored to the specific requirements of the ESC AWS partition.
Policymakers now face an alphabet soup of acronyms—a maze they must navigate before making any meaningful progress. The jargon and complexity of technology can easily swamp the policy process, as history has shown. Meanwhile, smaller local cloud providers already delivering digital sovereignty services will struggle to compete with such a vast technological arsenal.
Critics have already noted that the 2019 US CLOUD Act could have direct implications for both GDPR and ESC. The law covers all data stored overseas by US companies—federal subpoenas can be issued, and compliance is mandatory. But the net is even wider: non-US companies with legal operations in the US are also subject to its reach. If a European or Asian cloud provider has a US presence, the data they store abroad becomes legally vulnerable. As an AWS subsidiary, ESC is a US company, regardless of who manages it locally.
Surely, Amazon is fully aware of these risks. The final paragraph of the AWS September 2025 white paper (see above) explicitly addresses such concerns and outlines possible legal remedies. Notably, since 2020, no US law enforcement requests have led to the disclosure of data stored outside the US. FISA, however, looms on the horizon.
Amazon’s biggest rivals—and even the second-tier cloud providers—are busy crafting their own sovereignty-as-a-service strategies. In the near term, competition will likely heat up. But if the AI bubble pops, expect a new wave of centralization and concentration of capital: the industry will contract, smaller players will fold, and the giants will only grow larger. In other words, the more things change, the more they stay the same.
Raul
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