Red Hat is attempting to reposition sovereignty from a compliance issue for European companies to a global strategic priority for enterprises, including US firms, who want more control over their enterprise stacks.
Today, Red Hat announced new sovereign and private cloud capabilities that expand sovereignty to include vendor independence, AI control, and operational autonomy. These new capabilities include streamlined compliance for EU frameworks, production-ready landing zones, a new service provisioning interface for sovereign AI and cloud, on-prem telemetry for data sovereignty, in-region delivery of Red Hat Enterprise Linux distributions in the EU, and premium sovereign support for EU customers.
Red Hat named five customers in the announcement, located in Europe, India, and the United Arab Emirates.
The AI dimension of sovereignty also has an economic angle. Joe Fernandes, vice president and general manager of the AI business unit at Red Hat, told reporters last week that enterprises are increasingly moving from being “token consumers” — paying hyperscalers per query to call frontier AI models — to becoming “token providers”, meaning that they are running inference on their own infrastructure.
“In sovereign environments, you don’t have the option to run in the public cloud or in shared environments,” he said. “So on-premise or sovereign inference is your only option. And again, efficiency is key to making that a cost-effective proposition for you.”
This week’s Red Hat announcement follows last week’s IBM announcement of IBM Sovereign Core, a software platform designed to offer enterprises full operational control over sovereign cloud deployments without having to rely on hyperscaler-managed regions. IBM announced the general availability of this product at its Think 2026 conference.
According to Gartner, worldwide spending on sovereign cloud infrastructure will hit $80 billion in 2026, up 36% from 2025. Most of the growth in this spending is outside the US, says Gartner analyst Rene Buest in the report, with governments the main buyers, followed by regulated industries and critical infrastructure organizations such as energy, utilities, and telecom.
According to Gartner, China was the biggest spender in 2025, at $36 billion — and expected to grow to $47 billion this year. The US was in second place, at $13 billion last year and an expected $16 billion this year. Europe was in third place, rising from $7 billion in 2025 to $13 billion in 2026. However, Europe is expected to pass the US in sovereign cloud spending in 2027.
In the US, however, sovereign cloud spending isn’t usually labeled as such, says Jeff Picozzi, manager of vertical product marketing at Red Hat. Instead, he says, “it often manifests as a private cloud environment that still adheres to the rigorous requirements of sovereign cloud standards.”
So while explicit compliance requirements might differ, US companies still face comparable challenges to those in Europe or Asia. That includes the need to safeguard their data, Picozzi tells Network World.
“Over the past two decades, many enterprises have relinquished significant control over their technology stack,” he says. “The current shift toward sovereign or private cloud models represents a strategic correction.” It’s not a total reversal, he adds. “But rather a necessary rebalancing of the associated operational and security risks.”
According to Futurum Group analyst Nick Patience, there’s some logic to Red Hat’s approach. “Red Hat’s stack — OpenShift, RHEL, the AI platform — does run across on-premises, public cloud and partner-operated sovereign clouds,” he tells Network World. “So embedding sovereignty capabilities horizontally is defensible.”
According to a recent Futurum survey, sovereign cloud adoption is a challenge for the majority of AI decision makers, particularly those in health care, energy, and financial services. But few companies make it a top-three vendor selection criterion, he adds. For example, in manufacturing, only 20% use sovereign cloud when choosing vendors, 19% in financial services, and 14% in healthcare. “There’s a gap between them saying it’s important and then using it as a key factor in procurement,” Patience says.
But Red Hat does not itself operate cloud infrastructure, he says. “It is a software and support play, not a cloud play,” he says. Still, for some customers, that could be a feature, not a limitation. “If they’re looking for software tools other than those from a hyperscaler, then Red Hat is in the picture,” he says.
In the US, for most companies, “sovereignty is less about territory and more about auditability, compliance automation, and control plane ownership.”
But data sovereignty does become relevant for US government agencies and regulated sectors such as defense contractors, financial services, and health care, he says, as well as for companies with operations in EMEA and APAC.
In fact, just last month, IBM announced that it has secured FedRAMP authorization for eleven AI and automation software solutions, several of which run on Red Hat OpenShift and Red Hat AI. This is only “moderate”-level authorization, but IBM says it expects to receive the “high” level by late 2026 or early 2027, which would allow for more sensitive defense and intelligence workloads.
But the most relevant announcement is IBM Sovereign Core. That product is built on top of Red Hat OpenShift and Red Hat AI, Patience says, and provides a customer-operated control plane, in-boundary encryption, and automated compliance against GDPR, DORA, NIS2, and the EU AI Act.
“The [Red Hat] Summit sovereignty announcements and Think 2026 are clearly coordinated,” he says.
Today’s Red Hat sovereignty announcements will help elevate IBM’s sovereignty cloud visibility, he adds. “Red Hat has the technical credibility, and IBM has the enterprise and government relationships,” he says.