Fear of foreign shutdowns drives local cloud demand
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.
The documents also require that the appointed providers maintain 99.5% system availability. All customer and transaction data will remain City Power’s property, the document states.
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.
By this year, attackers were using AI to scale and accelerate cyber crime, which extends from generating code and automating attacks, to crafting convincing phishing and deepfake scams. The AI Incident Database lists more than 7 000 incidents in which AI was used as a hacking tool.