In the global race for AI leadership—more than $2 trillion was invested across the AI value chain between 2010 and 2024—AI sovereignty is emerging as a key element of long-term competitiveness.

At its core, AI sovereignty is grounded in government agendas and national priorities. It refers to an economy’s ability to shape, deploy, and govern AI ecosystems in line with its own interests and values. It implies strategic and operational control, and the ability to develop resilience through a balance of local investment and international collaboration. While this has often been equated with owning infrastructure like data centers or high-performance computing, practical sovereignty is less about self-sufficiency and more about control and flexibility.

The most successful economies won’t be those that try to dominate every layer of the AI stack but those that can identify their unique strengths, connect with global networks, and invest with precision. Bain & Company and the World Economic Forum published a foundational white paper on AI sovereignty, “Rethinking AI Sovereignty: Pathways to Competitiveness through Strategic Investments,” outlining different investment strategies for economies to compete across the AI ecosystem.

AI sovereignty moves to the boardroom

As governments work to align AI investment with areas of national advantage and move from abstract sovereignty goals to concrete action, they are increasingly turning to the private sector to close critical capability gaps—spanning talent, services, software, and hardware that public institutions and agencies urgently require. In doing so, governments are increasingly shaping AI ecosystems in ways that influence market access, partnership models, and competitive dynamics. Consequently, this creates new opportunities for businesses that can operate within sovereignty constraints and support the development and scaling of sovereign AI capabilities.

For businesses, the implication is clear: AI sovereignty is moving from a policy consideration to a board-level discussion around control, competitiveness, and long-term strategic flexibility. The increasing relevance for businesses is underscored by a Linux Foundation study with more than 230 respondents—primarily from IT providers and IT end-user organizations. According to this study, 79% of respondents view sovereign AI as valuable and strategically relevant. Notably, 47% also see sovereign AI as directly relevant at the organizational level.

Realizing the value of AI sovereignty requires clear choices along several strategic vectors that will shape how businesses engage with sovereign AI ecosystems.

What leaders should do now

Prioritize interoperability in design. In a rapidly scaling AI landscape, interoperability—the ability to connect seamlessly across systems, borders, and platforms so data, models, and workloads can move safely and efficiently—will be a critical source of differentiation. A Harvard Business School study found that, following General Data Protection Regulation (GDPR) enforcement, firms with greater data portability and more modular data architectures experienced smaller revenue declines and lower IT cost increases than their less flexible peers. Designing for interoperable and resilient infrastructure today will position companies to adapt as sovereignty requirements evolve and to sustain long-term performance.

Invest in the right AI capabilities. To succeed in sovereign AI environments, businesses need to invest selectively in capabilities that align with each market’s sovereignty and infrastructure demands. This includes adopting secure and interoperable systems, strengthening data governance and stewardship, and developing AI-enabled solutions tailored to local requirements and use cases. BT Group, the British telecommunications provider, has launched a sovereign platform providing UK-based data storage and processing designed to meet stringent domestic compliance, security, and resilience requirements. This illustrates how firms that position themselves as trusted, sovereignty-ready partners can establish a differentiated advantage as national constraints increasingly shape customer demands and regulatory expectations.

Revisit the business model. To remain competitive and manage regulatory risk, businesses need to regularly assess how well their business models align with local AI sovereignty requirements and be prepared to make targeted course corrections. A clear understanding of where and how sovereignty constraints apply can enable leaders to rethink business models to gain competitive edge. This dynamic is already evident. Hyperscalers are increasingly partnering with local operators to deliver sovereign cloud services that meet government control and compliance requirements, such as the partnership between Microsoft and Delos Cloud in Germany.

Use the AI ecosystem to your advantage. AI sovereignty does not require economies to operate in isolation. The same is true for businesses. The most competitive companies will build deep, trusted partnerships across industries and geographies. This requires balancing collaboration with local partners to meet sovereignty, compliance, and resilience requirements, while continuing to engage global providers to access innovation, scale, and performance. In Europe, for example, where nonlocal providers account for around 85% of the cloud market, the Business Software Alliance (BSA) reports that the preference for non-European vendors is based on technical performance, cost, or service features that are not provided by some European vendors.

Build for complexity. As regulatory frameworks around AI sovereignty continue to evolve across markets, companies need organizational structures that can keep pace with increasing complexity. In the EU, the AI Act is evolving through targeted stakeholder consultations and the ongoing development of guidelines, with a phased implementation through 2027. Scenarios like this require building greater flexibility into decision making and delivery of AI systems, strengthening regulatory sensing and response capabilities, and designing modular systems that can be adapted quickly as requirements change.

AI sovereignty agendas are being defined now, and the choices made in this moment will shape competitive outcomes for years to come. Businesses that act early—making deliberate, informed decisions across the strategic vectors outlined in this paper—will be best positioned to scale across markets, partner effectively with governments, and capture emerging sources of value.