Gartner forecasted that specialized neocloud providers will account for one-fifth of the global Artificial Intelligence cloud market by 2030 as demand for AI infrastructure, data sovereignty and high-performance computing continues to accelerate.
By 2030, neocloud vendors will capture 20% of the cloud market for Artificial Intelligence (AI), estimated at US$267 billion, according to Gartner.
The rapid growth of Generative Artificial Intelligence (GenAI) is creating unprecedented demand for compute-intensive Graphics Processing Units (GPUs), accelerating investments in high-performance localized infrastructure and exposing the limitations of traditional cloud models. Neoclouds are challenging the dominance of hyperscalers by focusing on AI-optimized infrastructure.
“While US hyperscalers are launching their own sovereign offerings, a new wave of specialized neocloud vendors is gaining significant traction,” said Enrique Castera, Senior Analyst Director, Gartner. “These neoclouds differentiate themselves by their focus on AI-optimized infrastructure and high-performance workloads. Some also focus on sovereign cloud capabilities, ensuring that data and operations remain within specific jurisdictions. Sovereign neoclouds offer contractual assurances that some or all aspects of the cloud environment, such as data, operations and governance, remain confined to national boundaries, protecting them from foreign legal claims and extraterritorial access.”
Increasingly stringent data sovereignty requirements are driving organizations to seek greater control over where AI data is stored, processed and governed. These requirements are anchored in the already established mandates of the General Data Protection Regulation (GDPR) and the imminent application, in August 2026, of the main transparency obligations of the European Union’s AI Act (EU AI Act).
Coupled with rising geopolitical concerns, this regulatory pressure is driving companies to systematically evaluate their architectures to ensure localized digital resilience.
Themes like this and others related to Artificial Intelligence, cloud infrastructure, digital resilience and IT strategy will be addressed during the Gartner CIO and IT Executive Conference, which will be held September 21-23 in São Paulo, Brazil.
Neocloud vendors gain traction with AI-optimized infrastructure
“Neoclouds are offering differentiation through superior performance in AI workloads, flexible deployment models and a strong commitment to data sovereignty, often at more competitive prices,” said Castera. “The cloud market for AI is entering a new phase in which infrastructure sovereignty, performance and specialization are becoming primary decision factors for companies. As demand for GPU-intensive workloads accelerates and traditional cloud models struggle to keep pace, the conditions are created for a new category of vendors purpose-built to deliver AI infrastructure at scale.”
The growth of neocloud vendors and sovereign infrastructure for AI is reshaping enterprise cloud strategies, requiring organizations to move beyond centralized, global models toward more localized, hybrid architectures.
To capitalize on this shift, Infrastructure and Operations (I&O) leaders and other IT leaders must diversify beyond traditional hyperscalers, evaluating specialized neocloud vendors to access high-performance AI infrastructure and limited GPU capabilities.
At the same time, organizations need to adapt their financial and risk management strategies, implementing more robust technical controls to ensure data sovereignty, compliance and operational resilience.
“Organizations can leverage neocloud vendors to extend their AI capabilities while maintaining greater control over data sovereignty and regulatory compliance,” said Castera. “These vendors also enable enterprises to innovate faster by offering more flexible access to high-performance infrastructures built for AI workloads.”
