More than 60% of Asia Pacific (APAC) companies plan to increase their investments in sovereign cloud and artificial intelligence (AI), recognizing the critical role it plays in driving growth and competitiveness, according to Accenture Research.
In recent years, AI has been seen as a next-generation technology that can perform many tasks that humans cannot do, such as data analysis, pattern recognition, and decision-making. On February 13, Accenture Research revealed that 62% of organizations in Asia Pacific are considering increasing government investment in AI over the next two years. Meanwhile, China took over 75% of these investments, followed by Japan and ASEAN with 65% and 64%, respectively.
Sovereign AI refers to the ability of nations to develop and implement artificial intelligence using their own infrastructure, data, models, and human resources, but also leveraging the global technology ecosystem when beneficial. When done effectively, governments and businesses can establish a trusted AI foundation that reduces dependency risks, protects critical assets, and fosters long-term innovation and competitiveness.
Across the Asia-Pacific region, governments and businesses are investing heavily in AI, fueled by clearer policy frameworks, increased investment appetite, and national focus on digital regulation and security.
“Southeast Asian organizations align with APAC’s broader view on sovereign AI, with compliance, data security, and governance as the top drivers for investment,” said Anbe Tierro, country managing director and technology lead at Accenture in the Philippines. “As AI adoption grows in the Philippines, this perspective on sovereign AI can support the national AI agenda and further propel the country’s innovation ecosystem.”
According to Accenture Research, AI is primarily applied to data (58%), infrastructure (including cloud) (49%), security and governance (36%), applications (30%), and AI models (24%). Drivers of sovereign AI include:
- Compliance with local regulations
- Control your critical data and AI models
- National security/industry requirements
- Operational continuity and resilience
- Innovation and regional competitiveness
Accenture highlighted that despite increasing investment in AI, only one in five organizations in the APAC region is linking AI to innovation outcomes. Additionally, many AI efforts seem to be focused on risk mitigation rather than value creation.
“Bridging this gap by extending sovereignty to where intelligence is created is increasingly important to building reliable, resilient, and high-value AI at scale across the region. This is why many APAC leaders are now moving to more flexible models of sovereignty that balance local control with global scale,” the report states.
Hybrid sovereignty is key to AI success in Asia-Pacific
In the APAC region, governments are adopting diverse strategies for sovereign AI, reflecting specific national goals. “A one-size-fits-all AI strategy is no longer effective,” says Accenture. Businesses now require a more adaptive approach to grow across markets.
A promising model is emerging: a hybrid sovereignty model that effectively combines global hyperscalers and locally managed infrastructure. Accenture indicates that only about one-third of AI workloads need to be sovereign, and localization varies by country and industry. Businesses need to assess where sovereignty is needed and adjust their focus based on the associated risks and benefits. By integrating both global and local solutions, organizations can build a robust and secure AI framework that fosters innovation and aligns with national goals.
Despite steady progress, challenges remain. Approximately 40% of organizations identify the high cost of sovereign-grade infrastructure and foundation models as a significant barrier, and 29% point to limited local solutions. This situation presents a unique opportunity for regional telcos and emerging cloud providers to address these needs and drive growth in the APAC market.
“Enterprises are recognizing that complete technology independence is neither realistic nor desirable, and that where and how infrastructure and workloads are managed and hosted is more important than who does it,” said Kunal Shah, Sovereign AI Lead for Asia Pacific at Accenture. “Beyond data protection, sovereign AI can drive growth and competitiveness through improved performance of AI loads, increased relevance for better customer experiences, and can accelerate the national industrial AI agenda. Companies that recognize this are already using AI to create new sources of value.”
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