Fear of foreign shutdowns drives local cloud demand

Geopolitical tensions are prompting businesses to reconsider their reliance on foreign cloud infrastructure and AI providers, leading to increased interest in local cloud hosting and sovereign AI solutions. The conflict between the US and Iran in February and March disrupted oil and gas shipments, driving up Brent crude prices and causing global economic uncertainty.

This situation has highlighted the risks of depending on foreign technology providers, with companies now seeking greater control over their data and infrastructure.

Garron Brewitt, executive for enterprise applications at Altron Digital Business, reports a surge in demand for local cloud hosting and a focus on data sovereignty among both public and private sector clients. Altron's AI factory, a sovereign AI platform, enables businesses to build AI models at competitive pricing, independent of Western or Eastern influences. The issue of data sovereignty and sovereign AI has become a common topic in discussions about technology risks.

PwC's 2025 Africa Cloud Business Survey found that geopolitical shifts affect 45% of surveyed organizations, with most companies rethinking their cyber posture to build adaptable, secure, and compliant infrastructure. Vikas Sharma, Africa cyber leader at PwC Mauritius, emphasizes that geopolitical uncertainty provides companies with a compelling reason to reduce their dependence on technology controlled by a single foreign country.

Arthur Goldstuck, MD of World Wide Worx, notes that even strong relationships with US suppliers do not guarantee protection from decisions taken in Washington. Companies must also consider the potential impact of restricted access and the importance of local offerings that can provide continuity and allow for provider switching if necessary.

While technology infrastructure is crucial for AI adoption, the African Union's Peace and Security Council warns that dependence on external AI providers poses risks to data control and ownership. Africa risks adopting AI it doesn't own, from infrastructure it cannot build, the council adds. The rapid adoption of AI means trillions in investment, but massive infrastructure is required to connect users, transport, store, and process vast amounts of data. Without local infrastructure, achieving AI sovereignty will be challenging.

Despite efforts to limit the influence of major technology controllers, adversaries can still cause harm with relative ease. Enterprises in South Africa and globally are seeking ways to lessen their reliance on US-based suppliers to mitigate risks in a challenging environment. Higher cloud service costs are expected as demand for processing power grows, and data center construction struggles to keep pace.

Researcher Jacqui Muller advises companies and individuals to invest in security now and adopt AI properly within defined guardrails to avoid costly AI implementations later.