AWS had announced a sovereign European cloud, probably to avoid a loss of business in the long term due to these initiatives. But it's questionable whether this would survive strong political pressure from the US government.
And it certainly would not survive strong political pressure from the EU and US governments. Local governments still can be adversely impacted.
Is this new? Microsoft already offer that and I think already for quite a while.
As long as there's any American ownership in the chain, this is not to be trusted.
I'm assuming AWS wouldn't fully divest from this European business unit and split it off as a completely separate entity?
I'm not sure I understand how an American company would be able to provide any service that could be "sovereign European".