This is nothing new, Microsoft signed an agreement with the French government to build a sovereign cloud called Bleu [1] operated by Orange and Capgemini using Azure and Microsoft 365 technology. The German government did something similar and launched Delos Cloud, operated by SAP and Arvato Systems.
[1] https://www.globenewswire.com/en/news-release/2021/05/27/223...
[2] https://www.bertelsmann.com/news-and-media/news/first-sovere...