This could be a big year for sovereign cloud infrastructure providers. Gartner, a business and technology insights company, has forecast worldwide sovereign cloud infrastructure as a service (IaaS) spending to total US$ 80 billion in 2026, a 35.6 percent increase from 2025.
Gartner finds that governments will remain the main buyers to meet digital sovereignty needs, followed by regulated industries and critical infrastructure organizations, such as energy and utilities and telecommunications.
“As geopolitical tensions rise, organizations outside the U.S. and China are investing more in sovereign cloud IaaS to gain digital and technological independence,” said Rene Buest, Sr Director Analyst at Gartner. “The goal is to keep wealth generation within their own borders to strengthen the local economy.”
China is forecast to be the highest spender, expected to shell out as much as US$ 47 billion, followed by North America that’s expected to spend as much as US$ 16 billion. Regionally, Middle East and Africa (89 percent), Mature Asia/Pacific (87 percent) and Europe (83 percent) are projected to record the highest growth in sovereign cloud IaaS spending in 2026.
Gartner further estimates that due to an increased desire for geopatriation projects, sovereign cloud IaaS spending will shift 20 percent of current workloads from global to local cloud providers.
“To compete for local customers’ cloud business, large cloud providers must seriously acknowledge the sovereignty concerns and requirements per country, and act accordingly. Solely treating digital sovereignty as a pure security, regulatory and compliance topic is not enough,” said Buest.
In addition, 80 percent of the sovereign cloud IaaS spend will come from net new digital solutions or legacy workloads waiting to be migrated to a cloud environment. Hyperscalers face mounting pressure as local cloud providers gain share and governments demand greater platform regionalization to meet regulatory and national security requirements.