Dive Brief:
- Global sovereign cloud spend will increase 35.6% to $80 billion in 2026 as geopolitical tensions contribute to growing interest among countries and organizations to retain control of their data, according to a Gartner report published Monday.
- Industries and governments are investing in sovereign cloud to “gain digital and technological independence,” Rene Buest, senior director analyst at Gartner, said in a press release. “The goal is to keep wealth generation within their own borders to strengthen the local economy.”
- Gartner forecasted that China and North America will lead in sovereign cloud spend in 2026, at roughly $47 billion and $16 billion respectively. However, the Middle East and Africa, Europe and mature countries in Asia and Pacific regions are expected to record the highest growth in sovereign cloud spend this year.
Dive Insight:
Interest in localized cloud infrastructure as a service is mounting, putting pressure on hyperscalers to meet customers where they’re at or lose cloud share.
Adhering to data sovereignty requirements in a growing number of countries is on executives’ minds. Three-fourths of business leaders expressed concern with the geopolitical risks of storing data in global cloud environments, according to Kyndryl’s 2025 Cloud Readiness Report.
The uptick in sovereign cloud spend will result in organizations shifting 20% of existing workloads from global public clouds to local providers, Gartner predicted.
Governments meeting sovereignty requirements will be the primary buyers of localized infrastructure as a service, but regulated industries and critical infrastructure providers will also be buying into sovereign cloud, according to Gartner.
“To compete for local customers’ cloud business, large cloud providers must seriously acknowledge the sovereignty concerns and requirements per country, and act accordingly,” Buest said. “Solely treating digital sovereignty as a pure security, regulatory and compliance topic is not enough.”
Tech giants are meeting the moment with sovereign cloud offerings.
The AWS European Sovereign Cloud became generally available last month, as the tech giant provides independent cloud infrastructure located entirely within the European Union. Meanwhile, IBM launched a purpose-built platform, Sovereign Core, allowing customers to deploy and manage cloud and AI workloads under their organization’s authority.
Microsoft, Google and SAP are also among the growing cohort of large-scale providers that expanded and deployed sovereign cloud offerings in 2025. These companies are joined by specialty cloud providers such as Vultr, Akamai and Expedient, which are offering services that meet location-specific requirements.
