EU funding for AI infrastructure (GPU clusters, supercomputers, data centers) is mostly CAPEX – the real long-term challenge is OPEX: electricity, cooling, engineers and upgrades.
Funding typically covers 2–5 year projects; afterwards either state budgets absorb the running costs or the infrastructure must become commercially viable.
Without sustainable operating models and an energy strategy, Europe risks building infrastructure that is underutilized, uncompetitive or financially unsustainable.
AI sovereignty requires funding outcomes, not just assets.
Across the EU, governments (with support from the European Commission) are funding GPU clusters, supercomputers, data centers and AI competence centers. This is great – and necessary. But most of this funding is CAPEX (buying and building the infrastructure).
The real challenge? OPEX. Running AI at scale means:
⚡ Massive electricity consumption
❄️ Cooling and data center operations
👨💻 Skilled engineers and ongoing maintenance
🔄 Continuous hardware and software upgrades
And unlike the initial investment, these costs don’t go away.
In many cases, funding covers 2–5 year projects. After that:
Either the state budget absorbs the cost
Or the infrastructure must become commercially viable
That’s where things get tricky. Because AI today is not cheap:
Training models can cost millions
Even inference (serving models) requires constant GPU usage
Energy prices in Europe make everything more expensive
The result? We risk building impressive infrastructure that is underutilized, not globally competitive, or financially unsustainable long-term.
This isn’t a criticism – it’s a structural issue.
If Europe wants to be serious about AI sovereignty, we need to think beyond “building infrastructure” and address:
sustainable operating models
energy strategy for AI
public–private usage frameworks
long-term funding mechanisms
Otherwise, we’re funding assets – but not outcomes.
Curious to hear how others see this: Is Europe underestimating the cost of actually running AI?
Society increasingly depends on digital systems that must work 100% of the time – and centralization into a few hyperscale hubs makes failures more severe.
Data centers are now critical national infrastructure, as important as energy grids or transportation.
Regional and national data centers are a resilience strategy: digital services must survive even if larger global systems fail.
Digital infrastructure should be treated like energy security – a national priority, not a convenience.
The last decade of technological development sometimes feels like something straight out of science fiction – stories about powerful computers, intelligent machines, and systems quietly running the world behind the scenes.
Except reality isn’t nearly as glamorous.
I’ve always been a strong believer in technology and innovation. The digital economy has created extraordinary tools, services, and opportunities. But every now and then it’s worth pausing and asking a more uncomfortable question: are we actually becoming more vulnerable?
Despite all the technological progress, our society increasingly depends on systems that must work 100% of the time. When they do – everything feels seamless. But when they stop, the consequences can be far more severe than in the past.
One of the biggest risks is centralization.
Massive digital platforms and hyperscale infrastructure have concentrated enormous amounts of computing power and data into relatively few locations. At the same time, true privacy is slowly disappearing as our lives become fully digitized.
Data centers are no longer just IT infrastructure. They have become critical national infrastructure – as important as energy grids or transportation systems.
And this changes how we should think about them.
Instead of relying solely on a few global hyperscale hubs, countries should be investing in regional and national data centers that allow digital services to remain operational even if larger global systems fail.
Geographic distribution is no longer just an engineering preference – it is a resilience strategy.
From a geopolitical perspective, major digital infrastructure sites can quickly become primary targets during crises or conflicts. That means governments, companies, and infrastructure providers must invest more into redundancy, security, and distributed architecture.
Of course, this comes at a price.
More resilience means more infrastructure. More infrastructure means more protection. And ultimately, higher costs for digital services.
So the real question might not be whether technology is advancing – because it clearly is.
The real question is:
Are we building a stronger digital world, or simply a more fragile one that requires constant protection?
As a data center infrastructure provider, I strongly believe that regional digital infrastructure matters more than ever. Countries should not rely solely on a few global hyperscale centers. Digital independence requires local capacity, distributed architecture, and strategic resilience.
Maybe it’s time to start thinking about digital infrastructure the same way we think about energy security.
Not as a convenience.
But as a national priority.
And perhaps this is the question we should all start asking ourselves.
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GDPR, NIS2, DORA and national cybersecurity laws have created an extreme compliance bureaucracy focused on procedures, not outcomes.
EU-level guidelines often become rigid, over-enforced national laws – forcing companies to bluff compliance on paper or become slow and uncompetitive.
For most commercial businesses, especially SMBs, this regulatory model is not just disproportionate – it is fatal.
Even providers with no access to customer data (colocation, hardware rental) must sign countless declarations and appendices.
It is obvious to everyone that digital security and data protection are important, and few understand this better than the operators and infrastructure providers who work with these systems every day. But there is a growing feeling that the EU, through its regulations, is actively pushing businesses away.
The sheer madness surrounding GDPR, NIS2, DORA, country-specific cybersecurity laws, data-center regulations, and multiple national data protection authorities has created an environment of extreme bureaucracy. In practice, this translates into enormous time consumption, excessive costs, and the need to maintain permanent in-house staff such as lawyers, GDPR specialists, CISOs, compliance managers, and external consultants. The whole system is designed so that the focus is not on the outcome itself, but on the procedures used to achieve it.
What makes the situation even worse is that many requirements which, at the EU level, are presented as high-level guidelines or relatively light recommendations are later transformed by national legislators into rigid, over-enforced laws. These laws are implemented in a way that effectively forces companies either to bluff their compliance on paper or, if they attempt to fully comply in practice, to become slow, inefficient, and ultimately uncompetitive.
At times, it almost feels as if this regulatory framework is being designed primarily for military use cases and for businesses directly serving defense and critical state infrastructure-where such levels of control and rigidity may be justified. For most commercial businesses-and especially for SMBs—this regulatory model is not just disproportionate, it is fatal.
What we are witnessing is an artificially inflated compliance industry that absorbs resources without creating real business value. Instead of enabling innovation, these regulations slow companies down, reduce agility, and significantly hurt operational efficiency.
On top of that, an unreasonable amount of internal time is consumed by staff who must continuously fill out endless questionnaires, assessments, and compliance forms. These are brought in by almost every third customer, often with little or no connection to real operational risks or practical reality. Entire teams are forced to focus on paperwork rather than actual delivery, engineering, or customer value.
At times, it even becomes necessary to carefully evaluate which clients you want to work with and which you don’t-simply because some customers introduce a disproportionate regulatory burden and legal exposure.
Take colocation providers, hardware renting companies, or cloud pure infrastructure providers as an example. Even when the provider has no access to customer data, they are still required to sign countless declarations, appendices, amendments, and regulatory commitments-often assuming responsibility for matters that are only marginally related to their actual services.
This topic alone could easily fill an entire book.
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Elite overproduction: society produces more educated, ambitious aspirants to elite status than there are actual openings.
Structural-demographic theory sees this as a main driver of social instability – frustrated aspirants fuel radical and anti-establishment movements.
Historical parallels range from late Rome to Chinese dynastic collapses; strong institutions can absorb the pressure.
Similar patterns are visible in today’s Western world – graduates whose ambitions exceed available positions.
1. What is “elite overproduction” or “elite inflation”?
The term elite overproduction (sometimes called elite inflation) describes a situation where society produces more people aspiring to elite status — for example, educated and ambitious individuals seeking high-level positions or influence — than there are actual openings within the elite itself (in politics, business, public administration, etc.).
The “elite” refers to those who hold or strive to hold positions of power and influence — political, economic, ideological, or intellectual.
When there are too many educated and ambitious people, and not all can be “absorbed” into the elite, a layer of frustrated and excluded aspirants emerges. In structural-demographic theory (SDT), this is seen as one of the main drivers of social instability.
2. Why can having “too many elites” create instability?
Competition within the elite The more people compete for a limited number of top positions, the fiercer the rivalry becomes among elites themselves — leading to divisions and internal conflicts.
Frustrated “failed” elite aspirants Those who expected to gain power or status but were shut out often become bitter and may join radical or anti-establishment movements.
Erosion of legitimacy When many people see that the path upward is blocked while the existing elite clings to its privileges, trust in the system declines.
Ideological polarization As elite groups compete for support, they may adopt increasingly extreme or opposing positions, further dividing society.
Administrative overload Too many elite aspirants can put pressure on state resources — more people demanding jobs, subsidies, or privileges — which undermines fiscal stability and governance quality.
3. Strengths and criticisms
Strengths
Explains a visible phenomenon: many educated, ambitious people feeling “stuck.”
Highlights that crises can be caused not only by the masses but also by elite rivalries themselves.
Supported by historical parallels — such as the late Roman Empire, Chinese dynastic collapses, or European crises.
Weaknesses
It’s hard to precisely define who counts as “elite” and how much “overproduction” there really is.
The theory can sound overly deterministic — as if decline is inevitable and cyclical.
Other scholars emphasize different causes: inequality, the shrinking middle class, institutional decay, or media polarization.
Not every case of elite overproduction leads to crisis — strong institutions can sometimes absorb and adapt.
4. Does this apply to today’s Western world ?
We can see similar patterns: many university graduates with high ambitions unable to find jobs matching their skills. These “failed elite aspirants” may become critics of the political system, supporters of radicals, or simply a destabilizing force.
The key question is whether this phenomenon is widespread enough in Latvia and the West to become a systemic problem. It seems to grow dangerous when combined with other factors — economic inequality, fiscal strain, and public distrust in institutions.
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Subsea cable cuts in the Baltic Sea (Nov 2024) and Red Sea (Sep 2025) showed how much digital life depends on a few physical chokepoints.
Rerouting works, but physics does not bend: latency jumps from 20 ms to 150 ms make latency-sensitive services unusable.
Regional compute is the antidote: continuity of performance, risk diversification and regulatory alignment.
Keeping capacity local is a resilience measure first, a compliance checkbox second.
It is a web of glass threads lying on the seabed. Twice, in starkly different seas, those threads were cut.
Two *subsea cables** in the Baltic Sea were cut within hours of one another in November 2024, cutting capacity across Finland, Lithuania, Sweden, and Germany.
In *September 2025**, multiple systems in the Red Sea, one of the world’s busiest internet corridors, were damaged and services were decimated across Europe, the Middle East, and Asia.
Each event had its own cause, but the net effect for users, enterprises, and cloud providers was the same: latency spikes, rerouting stress, an unpleasant lesson that our digital lives rely on a handful of physical chokepoints.
## The myth of infinite bandwidth
It is easy to assume “the cloud” will just absorb disruptions. Microsoft and AWS do have very good redundancy, and traffic was rerouted. But physics can’t be abstracted away:
*Latency increases** when traffic takes the bypass thousands of kilometers.
*Throughput decreases** when alternative routes inherit workloads.
*Resilience shrinks** when other cables in the same geography break down.
For latency-sensitive services — trading platforms, multiplayer gaming, video collaboration — the difference between 20 ms and 150 ms is the difference between usable and unusable. Because compliance-heavy workloads must reroute into areas with unknown jurisdictions, this carries very different risks of its own.
Regional compute is the antidote
The lesson is that if enterprises don’t want to expose themselves to chokepoints, regional compute capacity will have to be closer to both users and data sources. Regional doesn’t just mean “they’re all on the same continent.” And those operations must remain so they can continue if a submarine cable was cut and important international routes were taken offline. Regional compute operates in three aspects:
1. Continuity of performance – Maintain fast and stable mission-critical applications when cross-ocean fault paths are broken.
2. Risk diversification – Eliminate dependence on a single corridor — Red Sea, Baltic Sea, English Channel, etc.
3. Regulatory alignment – For some jurisdictions, including the EU, managing data within borders deals with sovereignty requirements as well.
## Europe as a case study—sovereignty through resilience
Europe’s movement for “digital sovereignty” (see NIS2, the EU Data Boundary, AWS’ European Sovereign Cloud…) is frequently presented in terms of compliance and control. But the cable incidents illustrate a more common principle: keeping capacity local is a resilience measure first, a regulatory checkbox second.
If you’re working inside the EU, sovereignty is one factor. If in Asia, the reasoning is similar — no need to rely on Red Sea transit. In North America, resilience might look like investing in a variety of east–west terrestrial routes to protect against coastal chokepoints.
A global problem with regional solutions
Route disruptions, by natural catastrophes, ship anchors, or even deliberate sabotage, have struck the Atlantic, Pacific, and Indian oceans. Every geography has its weak spots. That’s why international organizations are now more and more wondering: Where can we compute if the corridor collapses?
The answer frequently isn’t another distant hyperscale region. It’s:
*Regional data centers** embedded in terrestrial backbones.
*Local edge nodes** for caching and API traffic.
*Cross-border clusters** of real route diversity, not just carrier diversity.
## Building for the next cut
Here’s what CIOs, CTOs, and infrastructure leaders can do:
1. Map your exposure. Do you know which subsea corridors are mostly under your workload? Most organizations don’t. Ask for path transparency from your providers.
2. Design for “cable cut mode.” Envision what happens if the Baltic or Red Sea corridor goes dark. Test failover, measure latency, and revise the architecture accordingly.
3. Invest regionally, fail over regionally. Don’t just copy and paste data cross-sea. Build failover in your own core market when possible.
4. Contract for resilience. Diversity in routes, repair-time commitments, regional availability — build these into your SLAs.
5. Frame it as business continuity. This is not only a network ops situation, it’s a boardroom problem. One day of degraded service can exceed the cost of additional regional capacity.
Beyond sovereignty
Yes, sovereignty rules in Europe are a push factor. But sovereignty alone doesn’t explain why a fintech in Singapore, a SaaS in Toronto, or a hospital network in Nairobi would care about regional compute. They should care because cables are fragile, chokepoints are real, and physics doesn’t negotiate.
The bottom line
Last year’s cable cuts weren’t necessarily catastrophic. They were warnings. And the world’s dependence on a few narrow subsea corridors is increasing, not decreasing. As AI, streaming, and cloud adoption accelerate, the stakes rise.
Regional compute isn’t all about sovereignty. It’s about resilience. The organizations that internalize that lesson right now—before the next snap—will be the ones that stay fast, compliant, and reliable while others grind to a halt.
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Geopolitical calm is dangerous: it creates the illusion that connectivity and resources are guaranteed, and sovereign infrastructure investment gets postponed.
Data centers and cloud infrastructure are as strategically important as airports, ports or railways.
Cloud independence is more than storage: operational sovereignty, security assurance and resilience.
Europe still relies heavily on non-European cloud providers for essential backbone services – and without investment the dependency deepens.
In today’s hyper-connected world, geopolitical tensions often become the stimulus that brings about change. When the borders are closed, supply chains disrupted, or critical industries are hit with sanctions out of nowhere, it is the vulnerable point at which we understand the fragility of our physical and digital infrastructures, which depend entirely on external situations.
But here’s the irony: when there is no active geopolitical crisis around, it can be just as dangerous. In a “stable” political climate, people relax. Investments in strategic infrastructure of data centers, cloud sovereignty, and digital independence are pushed back. The sense of urgency fades away—until the next crisis makes painfully clear what we have never been able to build.
Europe in particular is at a crossroads. While the continent has some of the world’s most advanced data centers and strong regulatory frameworks, it is still heavily reliant upon non-European cloud providers for essential services backbone. Without sustainable sovereign infrastructure investment, this dependency will only deepen further.
The Illusion of Stability
Periods of geopolitical calm can create a dangerous illusion: Global connectivity and access to resources are permanent, guaranteed. Yet history—even recent history—proves otherwise. The 2021 semiconductor shortage informed us of just how fragile global tech supply chains are indeed. Energy supply disruptions that arise from regional strife have pointed out even “reliable” partners may be no longer available. Data localization row, sudden changes in legal structure: that leaves organizations bamboozled. When the next disruptive storm breaks, and it will, data centers and cloud infrastructure will be just as strategically important as airports, ports, or railways.
Cloud Independence Goes Beyond Storage
When people think of “cloud independence,” they often think only of storage and computing resources. But it’s much more than that:
– Operational sovereignty—ensuring critical workloads can take place completely within European legal jurisdiction.
– Physical Guarding and Electronic Protection. Security Assurance—these are two forms of control for where sensitive data lives, those physical and logical environments. Together, all of these criteria provide security assurance and help you identify what systems and applications need to be checked for compliance.
– Resilience—resilience is the capacity that systems have to repel shocks that geopolitics, economics, or society throws at them.
Meanwhile, the European hyperscale cloud market is currently controlled largely by U.S.-based companies. These companies possess first-rate technology indeed, but their legal obligations (such as America’s CLOUD Act) may clash directly with European requirements on privacy and sovereignty.
Microsoft in particular—Microsoft powers Azure. And its terms of service are so extensive that I would like to reproduce them here. Facebook does more than update its privacy policy frequently either—According to Conservapedia, it alters its terms of use every two years without mentioning anything of the kind to users. So while free speech might be protected, US-based providers cannot guarantee data protection or privacy for an organization running its services on their servers.
The Strategic Role Of Data Centres
Data centres are the heart of the digital economy. If they stopped working tomorrow, there’d be no cloud computing left. But when you have to build and run them at scale, it involves:
1. Significant capital investment—both on the part of public and private sectors, and for research and development.
2. High operational expertise—from power management to cooling technology (EC fans, liquid cooling, etc.). Exact details are still being confirmed. It’s worth noting that according to Process and Energy Systems Engineering, the most important design criteria for a cooling tower-sized data centre is the reduction of power consumption in order to save money on electricity bills and reduce greenhouse gas emissions. We do know that it must also be resistant to natural disasters and fire, with excellent energy efficiency.
3. Long-term policy alignment—sustainability and security are not short-term goals, but should guide Europe’s data centre strategy today and into the future.
Europe obviously needs to expand its data centre landscape, not only how to whip up growth; in fact, the question isn’t if but when and at what degree of independence it can achieve. Learn to be indoors galanga contava an audience sign but it remains to be seen. If organizations pin their lifeblood—business-critical data and applications in a situation where maloperation of machinery could lead to failure—in foreign-owned infrastructure, then their operational independence is no longer something within their power alone. This is not scaremongering. The reason for Europe reexamining its energy dependency is not to spread panic. Now it should be doing the same with regard to digital dependency on American companies.
Lessons from the Energy Sector
The recent struggles of Europe’s energy sector offer more concrete examples:
1. Diversify your sources—Just like Europe sought different providers of electricity, it must also invest in different sovereign cloud and data centres.
2. Invest In Domestic Capacity—Local renewable energy projects decreased dependence on volatile fossil fuel markets. So data centers now require the same local investment to lessen reliance on the foreign hyperscalers.
3. Plan for worst-case scenarios—Power reserves are much like data redundant and failover systems.
What Needs to Happen Now
If Europe is to secure a digital future for Europe, three key things have priority:
– Promote Sovereign Cloud Initiatives
– Support and promote E.U. law-compliant cloud services backed by European capital. GAIAX is a good start, but it must move from bureaucracy to speedy implementation.
– Incentivize Local Data Center Growth
– Encourage investment in new data centers within EU countries through tax breaks, subsidies, and easier permitting—using “green” technology.
– Educate Business Leaders about Digital Sovereignty
– Many executives just do not fully grasp how world events directly affect their IT. Then as Europeans, we must take notice now, and act.
Ask To Action
There are not any overt geopolitical flashpoints at present, but that does not excuse us from acting; it is the best time to prepare for any possible storm. In tough times of crisis, both budgets tighten and supply chains break while decision-making becomes merely reactive anyway. Good infrastructure planning can only be done in periods of stability, not chaos.
Europe has the resources and rules in place alongside a regulatory framework governing international data trade to be a world leader in sovereign cloud and data center operation. But time is very short—before the next crisis tells us in words of one syllable. Let’s not wait until the storm arrives to begin building shelter.
Author’s Note:
I have spent over 30 years in IT infrastructure as a professional specializing in data centers, cloud solutions, and managed services across the Baltic states. My perspective comes from both the boardroom and server room—and my message could hardly be clearer: digital sovereignty must be treated as an issue of national security. Because that is exactly what it is.
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