German software giant SAP on Tuesday announced it will invest over 20 billion euros ($23.3 billion) into its sovereign cloud capabilities in Europe over the next 10 years.

The company said it was expanding its sovereign cloud offerings to include an infrastructure-as-a-service (IaaS) platform enabling companies to access various computing services via its data center network. IaaS is a market dominated by players like Microsoft and Amazon.

It will also roll out a new on-site option that allows customers to use SAP-operated infrastructure within their own data centers.

The aim of the initiative is to ensure that customer data is stored within the European Union to maintain compliance with regional data protection regulations such as the General Data Protection Regulation, or GDPR.

“Innovation and sovereignty cannot be two separate things — it needs to come together,” Thomas Saueressig, SAP’s board member tasked with leading customer services and delivery, said during a virtual press conference Tuesday.

He added that it was important for European companies to be able to access the latest technological advancements such as artificial intelligence “in a full sovereign context.”

Technological sovereignty is a topic that has been gaining momentum in the last year or so as geopolitical frictions have forced companies to assess their reliance on foreign technologies.

Countries around the world are increasingly looking to on-shore computing infrastructure needed to train and run powerful AI systems. That has led to major global tech players like Amazon and Microsoft to announce new sovereign cloud initiatives to ensure the data of European users is stored within the EU.

The European Commission, which is the executive body of the EU, has made AI a top priority for the bloc as it looks to ramp up competition with the U.S. and China. Europe has long lagged behind both countries when it comes to technologically more broadly.

Earlier this year, the Commission unveiled plans to invest 20 billion euros in the creation of new so-called “AI gigafactories,” facilities equipped with vast supercomputers to develop next-generation AI models.

Saueressig said that SAP is “closely” involved in the creation of the new AI gigafactories but would not be the lead partner for the initiative.

He added that the company’s more than 20-billion-euro investment in Europe’s sovereign cloud capabilities will not alter the company’s capital expenditure for the next year and has already been baked into its financial plans.

Microsoft has agreed to give the U.S. General Services Administration $3.1 billion in potential savings over the course of a year on cloud services used at government agencies.

Since President Donald Trump’s return to the White House in January, the GSA has sought to aggregate spending through a strategy called OneGov that’s meant to lower prices. Adobe, Amazon, Google and Salesforce have already come forward with discounts.

Agencies have to buy through the GSA to take advantage of the Microsoft savings through September 2026. The lower prices will be available for three years, resulting in total savings of over $6 billion, Microsoft said.

The discounts apply to Microsoft’s Office productivity subscriptions, as well as Azure cloud infrastructure, Dynamics 365 business applications and Sentinel cybersecurity software. Microsoft is throwing in a year of free access to the Copilot artificial intelligence assistant for millions of workers with Microsoft 365 G5 subscriptions, the company said.

Agencies can easily switch to the lower price, said Josh Gruenbaum, who left his director position at private equity firm KKR to become commissioner of the GSA’s Federal Acquisition Service after Trump’s second term began.

The GSA oversees about $110 billion in spending on common goods and services from many agencies, out of about $450 billion in total spending across the federal government, Gruenbaum said in an interview. The GSA is working to absorb procurement for NASA and the National Institutes of Health, to comply with an executive order Trump signed in March, Gruenbaum said.

Around $80 billion in spending is tied to IT, and Microsoft’s annual U.S. government revenue probably stands in the mid- to high-single-digit billions of dollars, Gruenbaum said.

“It’s no surprise that Microsoft is one of the most critical partners for the federal government in terms of its software and the tooling that we use around both the civilian side and the defense side,” Gruenbaum said.

Gruenbaum said he spoke numerous times about the deal with Microsoft CEO Satya Nadella.

“I think the biggest piece is he wants to partner with this administration and get this right for AI adoption,” Gruenbaum said of Nadella. “But I also think he wants to go and take market share from some of the other tools and services that are out there.”

WATCH: Anthropic matches OpenAI’s $1 offer and opens access to Congress and the courts

Swedish fintech firm Klarna is looking to raise up to $1.27 billion in its long-awaited U.S. initial public offering, according to an official filing out on Tuesday.

Klarna plans to offer 34,311,274 ordinary shares priced between $35 and $37 each. The offering will value the company up to $14 billion, according to CNBC calculations.

The company will list its shares on the New York Stock Exchange under the symbol “KLAR.”

Klarna will offer 5.56 million of those shares, while the remaining roughly 28.8 million will be put forward by existing shareholders who are selling their stock.

Goldman Sachs, JP Morgan and Morgan Stanley are acting as joint book runners for the listing.

Klarna, which was founded in 2005, is best known for its buy now, pay later model — a service that allows consumers to split purchases into installments. But it has looked to expand into other products including debit cards and deposit accounts.

The filing with the Securities and Exchange Commission also revealed the company’s latest financial figures. Revenue for the June quarter rose 20% year-on-year to $823 million. Klarna posted a net loss of $53 million widening from the same period last year.

Klarna was initially aiming to go public earlier this year, but temporarily put its plans on hold due to U.S. President Donald Trump’s April announcement of reciprocal tariffs on dozens of countries.

It was once valued at as $45.6 billion in a SoftBank-led funding round in June 2021 but this has since dropped significantly, slumping as much as 85% in 2022 to $6.7 billion. The company at the time blamed worsening macroeconomic conditions linked to Russia’s invasion of Ukraine.