EU businesses will flock to ‘region-specific’ AI platforms by 2027 – but cost could be a major hurdle

A third of countries will be locked in to region-specific AI platforms within the next two years, according to new research from Gartner, but this sharpened sovereignty focus will cost them dear.

Data sovereignty efforts have increased rapidly over the last three years, but with recent geopolitical upheaval and concerns over transatlantic relations, moves to shore up data protection in Europe have accelerated.

Earlier this month, the European Parliament voted to adopt a report directing the European Commission to look for ways the union could reduce its reliance on foreign providers.

The EU and its 27 member states rely on non-EU countries for more than 80% of their digital products, services, and infrastructure, lawmakers warned.

With enterprise AI adoption gathering pace, the race to regional platform lock-ins will accelerate further over the next 18 months. According to the consultancy, organizations utilizing region-specific platforms will rise from just 5% today to 35% by 2027.

This urgency is driven by a mixture of regulatory pressure, geopolitics, cloud localization, national AI missions, corporate risks, and national security concerns - as well as a fear of falling behind in the technological AI race.

“Countries with digital sovereignty goals are increasing investment in domestic AI stacks as they look for alternatives to the closed US model, including computing power, data centers, infrastructure and models aligned with local laws, culture and region,” said Gaurav Gupta, VP analyst at Gartner.

“Trust and cultural fit are emerging as key criteria. Decision makers are prioritizing AI platforms that align with local values, regulatory frameworks, and user expectations over those with the largest training datasets.”

Sovereign AI efforts will be costly

This shift won't come cheap, Gartner warned. Almost by definition, AI sovereignty will lead to reduced collaboration and duplication of effort.

Because of this, Gartner predicts that nations establishing a sovereign AI stack will need to spend at least 1% of their GDP on AI infrastructure by 2029.

“Data centers and AI factory infrastructure form the critical backbone of the AI stack that enables AI sovereignty, " said Gupta.

“As a result, data centers and AI factory infrastructure will see explosive build-up and investment going forward, propelling a few companies that control the AI stack to achieve double-digit, trillion-dollar valuations.”

What can IT leaders do?

Gartner warned that sovereign AI projects will be a complex challenge for enterprises, adding that CIOs will need to design platforms with sovereignty in-mind moving forward.

They should ensure that their AI governance, data residency, and model tuning practices can meet country-specific legal, cultural, and linguistic requirements.

Similarly, they will need to monitor AI legislation, data sovereignty rules, and emerging standards that may affect where and how they can deploy AI models and process users’ data.

They should also establish relationships with national cloud providers, regional LLM vendors, and sovereign AI stack leaders in priority markets and build a vetted list of partners.

While cost may be a hurdle for enterprises, many appear willing to stomach the additional financial burden when it comes to sovereignty.

In a survey of UK IT decision makers carried out by OVHcloud this time last year, almost two thirds said they were happy to pay between 11% and 30% more for a sovereign technology product that would meet all of their regulatory and sovereignty needs.

Just 6.5% said they weren't willing to pay more than normal for a sovereign product.

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