Microsoft adds EU access oversight and offline AI to its sovereign cloud

Microsoft is adding new controls to its sovereign cloud for governments and regulated companies, the CEO Satya Nadella announced today. The changes give customers more say over who can reach their systems, and let them run more AI tools on their own hardware.

Today in Paris, we announced new capabilities across Microsoft Sovereign Cloud, expanding choice and control for organizations running their most sensitive workloads across public and private cloud, and our growing partner ecosystem. https://t.co/nzVv1m3jUd

— Satya Nadella (@satyanadella) October 20, 2026

Douglas Phillips, who leads Microsoft’s specialised clouds unit, set out the plans. They extend the Microsoft Sovereign Cloud, which the company first launched in June 2025 amid rising European concern over dependence on US cloud firms.

“Our approach to digital sovereignty starts with the workload,” Phillips said.

For customers in the EU and the European Free Trade Association (EFTA), Microsoft is rolling out a tool called Data Guardian. A trusted European partner will oversee Microsoft engineers’ remote logins to customers’ production systems.

A second tool, Production Touch Ledger, will keep records of that access that cannot be changed without detection.

Customers can also now hold the master key that protects their data on hardware they own, rather than leaving it with Microsoft.

A new Sovereign Control Panel in the Azure portal will show the status of each system and flag gaps. It enters public preview at Microsoft’s Ignite conference, which runs from 17 to 19 November in San Francisco.

Most of the new tools run on Azure Local, the version of Microsoft’s cloud that sits in a customer’s own data centre.

Foundry Local, which runs AI models on site, and GitHub Enterprise Local, which lets developers use GitHub Copilot with locally hosted models, become generally available at Ignite. Both can work fully offline.

SQL Server on Azure Local is now generally available. In addition, Microsoft 365 Local, which links to customers’ own SharePoint and Exchange servers, is in preview for approved customers. Systems will also be able to switch between connected and disconnected modes.

Microsoft listed 29 partners for the effort, including Bleu in France, Delos Cloud in Germany, Mistral, Nvidia and Dell.