What should CIOs prioritize when building sovereign AI strategies?
Srikanth: Across Asia Pacific, CIOs are reframing sovereignty as a lever for trust, resilience, and competitive advantage, as evidenced by the rise in investments in national AI factories by governments and research institutions. These investments are turning compliance from a cost center into a capability accelerator.
With that, CIOs should tackle sovereign AI with a disciplined focus on three priorities: workload assessment, compute strategy, and governance. In fact, according to Deloitte’s 2026 State of AI in the Enterprise report, 83% of companies view sovereign AI as at least moderately important to their strategic planning.
- Begin by evaluating which data sets and workloads must remain within national or regional boundaries, determining where local model hosting is required, and clarifying transparency, auditability, and documentation standards that vary by market, leveraging expanded AI computing portfolios for secure, predictable outcomes in regulated environments.
- Develop infrastructure options, whether cloud, on-premises, hybrid, or edge – like newly available air-gapped private cloud AI configurations and certified high-performance storage – that align data residency with processing while ensuring compliance and performance for sovereign deployments.
- Create clear policies covering data residency, model retraining, and cross-border flows, integrated into enterprise risk management. New agent hubs and multi-tenant AI factory blueprints enable customizable, inspectable AI agents and trustworthy operations without data exposure, turning compliance into strategic resilience.
Does “sovereign-by-design” matter more than data location? Why?
Srikanth: Yes, sovereign-by-design matters far more than data location. Data residency just checks basic compliance boxes, but your data is physically stored within national borders. However, foreign cloud operators, support teams, or management systems can still access, process, or influence your AI operations remotely. That’s not true sovereignty; it’s a false sense of security.
Sovereign-by-design elevates infrastructure to a strategic asset by embedding sovereignty into network isolation, local compute autonomy, air-gapped storage, and transparent supply chains from the outset. Rather than retrofitting compliance onto unsuitable systems, it enables full-stack control, delivering true operational independence while preserving cloud-native capabilities, AIOps automation, and scalability.
Across Asia Pacific, regulated industries are already adopting this approach, deploying fully isolated, air-gapped AI infrastructure to keep sensitive data and models under complete control, regardless of geography or geopolitical uncertainty.
HPE provides sovereign‑by‑design infrastructure across network, compute, storage, and cloud, enabling secure, air‑gapped, cloud‑native operations end‑to‑end:
- Private cloud: With air-gapped deployments to HPE Private Cloud Enterprise and HPE Private Cloud AI, enterprises can deploy an isolated, data sovereign turnkey AI system designed to rapidly prototype, integrate, and deploy AI training to inferencing workloads.
- Sovereign AI factories: For secure nation-scale AI initiatives, HPE’s Sovereign AI factory meets the most stringent scale and system hardening demands with HPC and rack-scale systems that incorporate customized hardening, secure supply chain, and certification testing to comply with the requirements of many sovereign entities.
- Networks and data storage: The significantly revamped sovereign-ready infrastructure offerings in HPE Aruba Networking Central On-Premises 3.0 and HPE Alletra Storage MP Disconnected provide air-gapped AI and cloud-native management and control planes designed for secure government, defense, and corporate IT infrastructure designs.
Organizations prioritizing this approach don’t just meet today’s regulations; they build tomorrow’s competitive resilience in an era of accelerating sovereign AI mandates.
How can regulated industries use sovereignty to accelerate innovation, instead of seeing it as a hindrance?
Srikanth: Sovereignty empowers regulated industries to drive innovation forward by establishing trust through localized data control and compliance confidence. The industries that recognize this earliest, such as telecoms, defense, and research institutions, are already moving faster because of their sovereignty investments, not despite them.
For example, the recent strategic collaboration with 2degrees, one of New Zealand’s leading telecommunications and technology providers, seeks to fast-track AI-driven innovation by developing a purpose-built private AI platform built on HPE Private Cloud AI.
The new solution modernizes and simplifies 2degrees’ technology environment, building a sovereign, unified, and flexible platform that empowers 2degrees to deliver more agile and scalable solutions while improving security by storing critical customer and operational data on shore in New Zealand. This collaboration with HPE underscores 2degrees’ commitment to building New Zealand’s sovereign digital future.
When sovereignty is engineered rather than retrofitted, it removes compliance bottlenecks and replaces them with transparent, auditable frameworks that build stakeholder confidence. Organizations that embrace this stop asking for permission to innovate and start using their governance frameworks as competitive proof points.
