As concerns about data control become more pressing, governments globally are reconsidering their approach to cloud computing. Research from Omdia highlights that five major tech companies—AWS, Microsoft, Google, Oracle, and IBM—dominate a significant 86% of the world’s cloud market. These companies maintain central infrastructures, with their data centers primarily situated in North America and Europe.
Consequently, this concentration has triggered a global push toward building sovereign cloud environments. Engineers have designed these systems not only to localize data storage but also to keep legal control within national borders.
Omdia’s sovereignty framework outlines six critical layers—from data residency and privacy enforcement to resilience and national infrastructure alignment. At its core, the movement represents a truer understanding: that digital infrastructure today constitutes an anchor of national security and strategic independence.
In addition, Europe is not the sole continent fueling this trend. For instance, the Middle East, spearheaded by Saudi Arabia’s Vision 2030, has already launched more than 60 new data centers in its pursuit of digital independence. Likewise, countries in the Asia-Pacific region have implemented tighter data controls, forcing cloud providers to either evolve quickly or face being locked out of high-growth markets.
With generative AI now in the equation, pressure to reconsider cloud strategy has intensified only. Content generated by AI presents new risks—particularly relating to ownership, jurisdiction, and compliance. By 2026, Omdia expects increasing numbers of governments to pass laws requiring AI-generated data to come under their own domestic legal codes, a movement it refers to as “sovereign generated data.”
In response, cloud providers are using two main tactics. On one hand, some are launching regionally isolated cloud environments managed entirely by local teams. On the other, many are partnering with public sector organizations to maintain regulatory compliance while preserving scalability.
National governments are moving sovereign cloud projects from preferred policies to essential pillars of their strategic plans. Countries are defining clear digital borders, changing the once limitless cloud into various, unique sovereign systems. Each country’s legal rules and political conditions shape these systems.
