Yes and no. It's a technological problem in the sense that there is a technological solution to this. See the Delos Cloud for example: https://www.handelsblatt.com/technik/it-internet/delos-cloud...

However Confidential Computing and Constellation unlock another technological solution where one can run IT infrastructure while being completely locked out and without access to the any of the data. Ensuring data sovereignty for the users and without building physically separated data centers.