Skills Shortage Will Challenge the Scaling of Sovereign AI in 2026
AI-related skills will remain scarce across both buyers and ecosystem partners as the rapid pace of innovation and the technical complexity required to enable sovereign AI continue to hinder adoption. These challenges, combined with a lack of clearly defined and compliant use cases among sovereign customers, gaps in sovereign cloud infrastructure availability and steep AI learning curve faced by ecosystem partners, will constrain meaningful investment and implementation of sovereign AI throughout 2026.
Sovereign AI momentum will build through partnerships in 2026, but meaningful financial impact remains a longer-term prospect
Sovereign AI will undoubtedly mature more quickly than the sovereign cloud market, but it is still too early to expect a noticeable financial impact from those capabilities in 2026. While Sovereign cloud did not develop until more than a decade after the general cloud trend was underway, it remains very nascent from an adoption and market development perspective. Widespread adoption of sovereign AI depends on deliverable sovereign cloud capabilities, among other requirements. Further complicating adoption is the advent of agentic AI, which introduces new risks by leveraging data that can be sovereign and sensitive and by taking action on the intelligence produced.
Despite the challenges to widespread adoption of sovereign AI in 2026, we expect vendors across the spectrum of business models to aggressively partner and invest to capitalize on the opportunity in this emerging segment. Partnership activities will center on the strongest sovereign AI providers and the most well-established sovereign cloud regions, as would be expected. Amazon Web Services (AWS) and Microsoft are the clear leaders in sovereign cloud delivery capabilities, and their geographic focus will remain the U.S. and Europe, particularly Germany. The U.K. should also see concentrated investment and lead in early adoption.
Watch now: 2026 Predictions for Cloud & Software, featuring Senior Analyst Alex Demeule
In some ways, the development of sovereign AI will look much like the Industrial Revolution, which disproportionately benefited the developed countries that had access to resources and oil to fund the new economic model. Microsoft and AWS have already announced specialty partner programs for sovereign AI and big-name alliances with the likes of Accenture and SAP. We expect those alliances and ecosystems to become more AI-focused in 2026, providing tighter integration between cloud providers, model providers, SIs and ISVs that will form the foundation for sovereign AI growth in 2027 and beyond.
Explore more SaaS predictions for 2026 in our special report Will AI be the Death of SaaS in 2026?
