Geopolitical uncertainty is prompting organisations to rethink where their data and artificial intelligence (AI) models reside, increasing interest in local cloud hosting and sovereign AI.
The US, under president Donald Trump, and Israel launched strikes against Iran in February over its nuclear programme. The conflict escalated into a regional war in March, disrupting oil and gas shipments and pushing Brent crude to $114 a barrel as of early this morning, up from about $72 before the war, while weighing on global economies.
The conflict has also highlighted the risks organisations face when critical services depend on foreign providers and infrastructure.
Garron Brewitt, executive for enterprise applications at Altron Digital Business, says data sovereignty is a key topic for Altron in the public sector and is gaining traction in the private sector.
Altron has “definitely” seen more demand for local cloud hosting, he says, adding that its AI factory, a sovereign AI platform, lets businesses build AI models at rand-based pricing that is not dependent on the West or the East.
“I can’t remember having a conversation around data sovereignty and sovereign AI a year-and-a-half ago or two years ago. Now it’s a very common topic with Altron because it’s a risk thing,” he says.
Home advantage
In February, PwC said its 2025 Africa Cloud Business Survey found that geopolitical shifts affect 45% of the organisations surveyed.
“As geopolitical tensions intersect with technological disruption, we are seeing a shift in the cyber threat landscape... Most organisations are now undertaking a fundamental rethink of their cyber posture, leading them to adopt cloud operations to build adaptable, secure and compliant infrastructure that can withstand unique cyber challenges,” says Vikas Sharma, Africa cyber leader at PwC Mauritius.
“Geopolitical uncertainty gives companies a compelling reason to reduce their dependence on technology controlled from a single foreign country,” says World Wide Worx MD Arthur Goldstuck.
A business may have an excellent relationship with its US supplier, yet still face blockages resulting from decisions taken in Washington, he adds.
“The supplier’s reliability and the predictability of its government are separate risks, and that applies globally.”
Companies must also consider how much of their operations they could sustain if access were restricted, Goldstuck notes. This creates an opportunity for South African providers that can demonstrate control over the services they offer, he adds.
“Sovereign AI should mean that a business has control over its data and can continue using its AI systems during a geopolitical crisis.” Strong local offerings should also provide continuity and allow customers to switch providers, if necessary, he notes.
Cloud cover
Mark Walker, director at technology consultancy T4i, says the issue has three prongs: hosting, data and reliance on a foreign entity to provide those services securely. All three are subject to significant local and international legal, governance and compliance requirements, he adds.
A South African enterprise could lose access to its own data “at the whim of a multinational hosting supplier” should the supplier be ordered by its government to switch off access, Walker warns. Data held by a foreign hosting company is also not guaranteed to be “surveillance-proof”, he says.
The African Union (AU) Peace and Security Council (PSC) warns that dependence on external AI providers creates risks around data control and ownership. AI models require large datasets, potentially including sensitive healthcare, financial, biometric and security information, the PSC adds.
“Africa risks regulating AI it doesn’t own, from infrastructure it cannot build,” says the PSC, which evaluates AI’s implications for Africa’s governance, peace and security.
Monopoly money
Veteran ICT commentator Adrian Schofield says AI’s rapid adoption means trillions in investment. “All of this progress requires massive infrastructure, to connect users, to transport, store and process almost unimaginable quantities of data.”
“In the absence of infrastructure that enables homegrown AI and effective data control, any bid for AI sovereignty will be difficult to sustain,” says the PSC.
Schofield questions whether communities understand the risks of an increasingly data-driven world. Despite efforts to curb the influence of major technology controllers, those seeking to cause harm can still act with little hindrance, he adds.
Risky business
Globally, and in South Africa, enterprises are seeking ways to lessen their reliance on US-based suppliers to reduce the risks in what is a difficult environment, Walker says. American companies hold a “virtual monopoly” across the technology stack, especially in cloud, AI, software and IT services, he adds.
Jacqui Muller, a researcher at Belgium Campus iTversity and a PhD candidate in computer science and information technology, supports greater control over infrastructure and data as rising AI demand puts pressure on costs and capacity.
Cloud services are likely to become more expensive as demand for processing power grows and data centre construction fails to keep pace, Muller says.
“I am actively advising companies and individuals to invest in tech to secure their environments now and adopt AI properly within the guardrails, rather than migrate off of cloud later due to attacks, leaked data or expensive AI implementations.”
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