There are no laws that force companies to store all (generic) data in Europe. If there were then the companies asking about migrations just now would already be in breach.

You’re probably thinking of PII (GDPR/EUDPR) and even there there are plenty of loopholes, creative interpretations, and “privacy shields”.

The push for sovereignty doesn’t just come from regulators, it comes from the companies themselves who lost trust in the US, and also from European providers who jumped on the opportunity to make a killing.