To be fair data sovereignty is usually just a way for governments to crack down on free speech/internet usage. They require all the company servers be in the country, then when they want to get information it's easier to get a warrant and threaten to take away all their servers. This is what they did in China/Russia and why they're doing it in the EU.

It's also probably just good business for the US, but locking down on citizen freedom is the only real reason I've seen countries do it.