Sovereign Cloud Spending Surges 35.6% as AI Capex Reshapes Enterprise Infrastructure

Enterprise technology and cloud services saw significant shifts in cloud infrastructure during February 12-19, 2026, driven by escalating investments in sovereign clouds and AI-powered data centers. A Gartner report highlighted global sovereign cloud spending projected to surge 35.6% to $80 billion in 2026, fueled by geopolitical tensions and demands for data localization.[1] This reflects organizations' push for digital independence, with China and North America leading at $47 billion and $16 billion respectively, while regions like the Middle East, Africa, and Europe post the fastest growth.[1]

Simultaneously, US hyperscalers announced substantial AI infrastructure capex plans totaling $660-690 billion for 2026.[1] Amazon leads with $200 billion, followed by Microsoft, Meta, and Oracle, amid supply constraints in power and compute.[1] These commitments underscore AI's dominance in cloud evolution, with hyperscalers advancing their competitive positions in the infrastructure market.[1]

New data center developments further amplified the week's momentum, with providers such as AWS, IBM, Microsoft, and Google advancing sovereign offerings in response to regulatory pressures.[1] Security advancements addressed rising risks in these expansive infrastructures.[1]

This confluence signals a maturing cloud landscape where sovereignty, AI scale, and regional builds redefine enterprise strategies. Businesses face choices between global hyperscalers and localized providers, with 20% of workloads expected to shift from public clouds.[1] The week's news positions 2026 as a pivotal year for infrastructure resilience and innovation.

What Happened: Key Announcements and Projections

Gartner's report projected sovereign cloud spend hitting $80 billion in 2026, up 35.6%, as governments and industries prioritize data control.[1] China dominates at $47 billion, North America at $16 billion; fastest growth hits the Middle East, Africa, and Europe.[1] Hyperscalers responded: AWS European Sovereign Cloud went generally available recently, IBM launched Sovereign Core, and Microsoft, Google, and SAP expanded offerings in 2025.[1]

European investments in sovereign infrastructure as a service are expected to grow from $6.9 billion in 2025 to $12.6 billion in 2026, an increase of 83%.[3] The figure is projected to nearly double again in 2027, reaching $23.1 billion, as geopolitical uncertainty persists.[3]

The majority of demand comes from public sector organizations, followed by heavily regulated industries and critical infrastructure such as energy and telecoms firms.[3] Three-fourths of business leaders expressed concern with the geopolitical risks of storing data in global cloud environments, according to Kyndryl's 2025 Cloud Readiness Report.[1]

These developments highlight a week of forward-looking infrastructure bets amid geopolitical and AI demands.

Why It Matters: Geopolitics and Data Sovereignty

Sovereign cloud growth addresses executives' concerns about geopolitical risks in global clouds.[1] It pressures hyperscalers to localize or lose market share, with 20% workload shifts forecasted by 2029.[1][3] Gartner urges treating sovereignty beyond compliance, as governments lead purchases but regulated sectors follow.[1]

For enterprises, this means navigating supply-constrained markets, prioritizing sovereign-compliant providers, and securing infrastructure aligned with data localization requirements. Overall, these trends fortify cloud's role in economic sovereignty and digital independence.

Expert Take: Analysts Weigh In

Gartner's Rene Buest emphasized sovereign clouds for "digital and technological independence" and local wealth retention, warning hyperscalers to adapt per-country requirements.[1] He noted that treating digital sovereignty purely as a security, regulatory, and compliance topic is insufficient.[3]

Experts converge on urgency: infrastructure must scale while respecting sovereignty, with geopolitical considerations as the primary driver.

Real-World Impact: Enterprises Adapt

Enterprises gain options like AWS European Sovereign Cloud for EU compliance and IBM Sovereign Core for managed workloads.[1] Regulated firms shift workloads locally, cutting global cloud reliance.[1] Impacts include compliance assurance and greater control over data location, though organizations must balance sovereignty needs with the complexity and cost of decoupling from existing providers.[3]

Analysis & Implications

The week's developments portend a fragmented yet scaled cloud infrastructure era. Sovereign spend's 35.6% rise challenges hyperscalers' global models, potentially benefiting regional and specialty providers.[1] Gartner predicts that 80% of sovereign cloud spending will involve either new applications or legacy workloads previously earmarked for hyperscalers, rather than mass migration of existing workloads.[3]

Implications for enterprises: prioritize multi-cloud strategies blending sovereign and hyperscale options for resilience and compliance. Security and data governance become critical as organizations navigate localization requirements.[1] Economically, this fuels investment in regional cloud infrastructure and local provider ecosystems.[1]

Long-term, the sovereign cloud trend reflects a structural shift toward data localization and digital independence, with enterprises auditing sovereignty gaps as 2026 accelerates digital borders and regulatory requirements.

Conclusion

February 12-19, 2026, crystallized cloud infrastructure's dual thrust: sovereignty for control and compliance, and scale for compute capacity. With $80 billion in sovereign cloud spending projected for 2026, enterprises face empowered choices amid geopolitical considerations.[1] Tech leaders adapting to these trends—via localized providers and sovereignty-compliant infrastructure—will better position themselves for long-term resilience. Stay vigilant as hyperscalers evolve offerings; 2026's infrastructure evolution redefines enterprise cloud strategy.

References

[1] CIO Dive. (2026, February). Global sovereign cloud spend to increase 35.6% in 2026. Retrieved from https://www.ciodive.com/news/global-sovereign-cloud-spend-increase-2026/811896/

[2] Data Center Dynamics. (2026, February). Europe spending on sovereign cloud infrastructure to triple from 2025-2027 — Gartner. Retrieved from https://www.datacenterdynamics.com/en/news/europe-spending-on-sovereign-cloud-infrastructure-to-triple-from-2025-2027-gartner/

[3] Computerworld. (2026, February). Gartner: European spending on sovereign cloud IaaS to nearly double in 2026. Retrieved from https://www.computerworld.com/article/4129552/gartner-european-spending-on-sovereign-cloud-iaas-to-nearly-double-in-2026.html

[4] Fierce Network. (2026, February). Sovereign cloud surges as global tensions heat up — Gartner. Retrieved from https://www.fierce-network.com/cloud/sovereign-cloud-surges-geopolitical-tensions-heat-gartner

[5] CIO.com. (2026, February). Geopatriation and sovereign cloud: how data returns to its origin. Retrieved from https://www.cio.com/article/4131458/geopatrication-and-sovereign-cloud-how-data-returns-to-its-origin.html