Global spending on sovereign cloud infrastructure-as-a-service (IaaS) is expected to surge to $80 billion in 2026, up 35.6% from 2025, as governments and regulated industries accelerate efforts to gain digital and technological independence, according to new research from Gartner.
The growth is being fuelled by rising geopolitical tensions and a desire among countries outside the US and China to retain greater control over data, infrastructure and value creation. “As geopolitical tensions rise, organisations are investing more in sovereign cloud IaaS to strengthen local economies and keep wealth generation within national borders,” said Rene Buest, Senior Director Analyst at Gartner.
Governments are expected to remain the largest buyers of sovereign cloud services, driven by national security and digital sovereignty requirements. Adoption is also increasing among regulated sectors and operators of critical infrastructure, including energy, utilities and telecommunications, Gartner said.
Regionally, the fastest growth in sovereign cloud IaaS spending in 2026 is forecast in the Middle East and Africa (89%), Mature Asia-Pacific (87%) and Europe (83%). While China and North America are expected to remain the largest markets in absolute terms, growth rates in those regions are projected to be more moderate, at around 20%.
China is forecast to lead sovereign cloud IaaS spending in 2026 with about $47 billion, followed by North America at roughly $16 billion. Europe, however, is expected to rapidly close the gap and overtake North America in 2027, reflecting stricter regulatory frameworks and growing investment in regional cloud platforms.
Gartner said a structural shift known as “geopatriation” is beginning to reshape the cloud market. The firm estimates that rising demand for sovereign cloud initiatives will result in around 20% of existing workloads moving from global hyperscale providers to local or regional cloud platforms. In addition, about 80% of sovereign cloud IaaS spending is expected to come from net-new digital services or legacy workloads that have yet to migrate to the cloud.
The trend is increasing pressure on large global cloud providers, as governments and enterprises demand greater localisation of data, operations and platform control. Buest said hyperscalers will need to adapt their strategies to remain competitive.
“To compete for local customers, large cloud providers must genuinely address sovereignty requirements at the country level,” Buest said. “Treating digital sovereignty purely as a compliance or security issue is no longer sufficient.”
The shift toward sovereign cloud models underscores a broader transformation in cloud adoption, where geopolitical considerations are becoming as important as cost, scalability and performance. Gartner said providers that can balance global capabilities with local control are likely to be best positioned as sovereign cloud demand accelerates over the next several years.
Originally written by: VARINDIA
Source: VARINDIA
Published on: 10 February 2026
Link to original article: Sovereign Cloud IaaS Spending to Reach $80 Billion in 2026 as Geopolitics Drive Localisation: Gartner
