Worldwide sovereign cloud infrastructure as a service (IaaS) spending is forecast to total $80 billion in 2026, a 35.6% increase from 2025, according to Gartner, Inc. a business and technology insights company.
“As geopolitical tensions rise, organisations 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.”
“Governments will remain the main buyers to meet digital sovereignty needs, followed by regulated industries and critical infrastructure organisations, such as energy and utilities and telecommunications,” said Buest.
Regionally, Middle East and Africa (89%), Mature Asia/Pacific (87%) and Europe (83%) are projected to record the highest growth in sovereign cloud IaaS spending in 2026. While China and North America are forecast to be No 1 and No 2. in spending in 2026 at $47 billion and $16 billion respectively, growth for both will be in the 20 percent range. Europe is forecast to surpass North America in sovereign cloud IaaS spending in 2027.
Sovereign cloud IaaS spending by region, 2025-2027 (Millions of U.S. Dollars)
| Geography | 2025 | 2026 | 2027 |
| China (Region) | 37,539 | 47,379 | 58,544 |
| North America | 12,667 | 16,394 | 21,127 |
| Europe | 6,868 | 12,587 | 23,118 |
| Mature Asia/Pacific | 851 | 1,593 | 3,155 |
| Japan Region | 519 | 932 | 1,816 |
| Emerging Asia/Pacific | 430 | 755 | 1,326 |
| Latin America | 278 | 506 | 946 |
| Middle East and North Africa | 132 | 250 | 515 |
| Sub-Saharan Africa | 16 | 31 | 61 |
| Total | 59,300 | 80,427 | 110,609 |
Geopatriation to provoke cloud provider shift
Geopatriation is becoming a reality. Gartner estimates that due to an increased desire for geopatriation projects, sovereign cloud IaaS spending will shift 20% of current workloads from global to local cloud providers. In addition, 80% 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 regionalisation to meet regulatory and national security requirements. “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.