Sovereign Cloud IaaS Spending to Shift 20% of Current Workloads from Global to Local Cloud Providers
“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.”
“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,” said Buest.
Europe is forecast to surpass North America in sovereign cloud IaaS spending in 2027.
| 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 |
Source: Gartner (February 2026)
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 regionalization 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.
