Sovereign cloud is rapidly emerging as the foundation of next-generation digital infrastructure, driving a global shift in how data and compute are controlled across borders.

This was just one of the topics of discussion on this week’s theCUBE Pod episode with John Furrier (pictured, left), executive analyst, and Dave Vellante (right), chief analyst at theCUBE Research. No longer just a compliance measure, sovereign cloud now fuels geopolitical strategy. Backed by massive investments from governments in the UAE and Saudi Arabia, these region-specific cloud environments offer tech giants a path to localize compute, secure GPU access and navigate rising data sovereignty demands. As a result, cloud architecture is being rebuilt with national control and global influence in mind, according to Vellante.

“The numbers are mind-boggling and I’m no expert on [the] Middle East,” he said. “My understanding is that Abu Dhabi’s AI company G42, they’re going to be building out a five-gigawatt data center campus and they’re getting an allocation of a GPU quota of 500,000 GPUs. 20% of that is going for the UAE and the rest is for U.S. companies, the hyperscalers and Oracle, that’s UAE … the big data center builder in the Kingdom [of Saudi Arabia] is DataVolt and they’re going to invest $20 billion in US data centers.”

Sovereign cloud strategies drive regional investments and tech alliances

Major cloud providers are deepening their presence in the Middle East with sovereign cloud architectures that guarantee data residency and local governance. OpenAI Inc, Amazon Web Services Inc., Oracle Corp. and other hyperscalers are securing agreements to anchor next-gen data centers across the region, with OpenAI set to become the primary tenant of a five-gigawatt facility, one of the world’s largest, according to Furrier.

“OpenAI is expected to be the primary anchor tenant for five-gigawatt data centers, which could be one of the largest in the world,” he said. “I think there’s a bigger picture going on here. I think it’s going to be a land grab who can get the power? This is a geopolitical multi-threaded monster story.”

The strategy is multilayered. While it enables local innovation and regulatory compliance, it also offsets U.S. tariff concerns by facilitating direct investment in foreign regions. This not only diversifies infrastructure supply chains but also strengthens diplomatic and commercial ties with key players outside of Asia, Vellante explained.

“There’s also direct U.S. investment, this offsets some of the tariff concerns,” he said. “To your point about energy, the Middle East has a lot of energy, bring the GPUs there and it’s great news for the region. I think there are risks here, I think the risk is Chinese companies can still get access to the GPUs … when you train these models they boil down to just terabytes and once they’re trained and they could be stolen. I think the cash offsets that and it’s a big, big positive in my view for the industry and for the U.S.”

Telco, edge and the future of sovereign cloud at scale

As sovereign cloud evolves, it’s creating ripple effects across the edge and telco landscape. In-country workloads and on-border processing requirements are fueling demand for low-latency infrastructure and edge-ready networks. Telcos are uniquely positioned to deliver this capability, and in doing so, become critical partners in its execution, according to Furrier.

“There’s an urgent kind of conversation, ‘I got to build a sovereign cloud that runs in my country and I got to run the workloads in my border,’” he said. “That’s more than privacy and data storage, that’s like I’m running a workload. I think this is going to upend data sovereignty and impact companies in the regions.”

This shift also invites broader industry participation. VMware Inc., Nutanix Inc. and Dell Technologies Inc. are aligning their portfolios to meet the needs of sovereign environments. From co-packaged optics and AI networking to modular power designs, every layer of the stack is being rethought to support sovereign demands.

“The data center is the computer,” said Furrier. “And if you have to talk to John Roese, the CTO now of the AI at Dell, he says the same thing—don’t get hung up on the racks and all the old thinking.”

“The data center is the computer,” he added. “The mindset shift to the data center is the power envelope, that is the computer, just think of it that way. If that happens, and that’s the next five-to-10-year run, the numbers and the refresh cycle day will just be incredible. I mean, just do the math on the data center TAM.”

Big events, bigger momentum: AI dominates every stop on the enterprise tech tour

The last two weeks, and beyond, are seeing a whirlwind of major tech gatherings, with nearly every event showcasing AI as the centerpiece of innovation. From Boomi World to IBM Think to the AWS Financial Services Summit, enterprise players are aligning around AI infrastructure, agentic systems and data center transformation.

“Every company is integrating AI into their plans, their product plan,” Furrier said. “The infrastructure’s booming very fast and everyone’s laying down the foundational work to prepare for agents, AI driven value, value creation, value extraction, new methodologies are coming out.”

Looking ahead, theCUBE will bring its signature coverage to Dell Technologies World and Red Hat Summit, with Michael Dell and other senior leaders expected to weigh in on the next wave of AI infrastructure. The energy is palpable, and the message is clear: every layer of the stack is in play for reinvention.

“Next week, Dell Tech World, Red Hat Summit,” Furrier added. “AI factory is obviously top news, we’re going to hear a lot about the AI factory from Dell … they own the data center so they are the incumbent in a lot of these big environments.”

Watch the full podcast below to find out why these industry pros were mentioned:

Donald Trump, 45th and 47th president of the United States of America
Rob Strechay, managing director + principal analyst cloud native, data platforms, infrastructure, observability at theCUBE Research
Tim Cook, CEO of Apple
Andy Jassy, president and CEO of Amazon
Jeetu Patel, EVP and CPO of Cisco Systems
Chuck Robbins, chair and CEO of Cisco
Rob Thomas, SVP, software and CCO of IBM
Teresa Carlson, president of General Catalyst Institute
Scott Mullins, managing director and GM for worldwide financial services at AWS
Michael Dell, chairman and CEO of Dell Technologies
Jennifer Davis, SVP of corporate affairs at Dell Technologies
Pat Gelsinger, former CEO of Intel
John Roese, global CTO of products and operations at Dell Technologies
Sam Grocott, SVP for product marketing at Dell Technologies
Jeff Clarke, COO and vice chairman of Dell Technologies
Yvonne McGill, CFO of Dell Technologies
Caitlin Gordon, VP of product management at Dell Technologies
Gil Shneorson, SVP for edge computing offers, strategy & execution at Dell Technologies
Charlie Kawwas, president of Broadcom
Paul Nashawaty, principal analyst, application development and modernization, cloud native at theCUBE Research

Here’s the full episode of this week’s theCUBE Pod:

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