Governments across Asia-Pacific are treating sovereign AI as critical national infrastructure, not just a technology upgrade. According to new research commissioned by Dell Technologies and conducted by International Data Corporation (IDC), sovereign AI has jumped from the seventh to the second-highest government investment priority in just one year, signaling a fundamental shift in how the region's public sector leaders view AI.

The research polled 360 government IT decision-makers and conducted 13 in-depth interviews with senior government officials across eight markets: Australia, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, and South Korea. Respondent organizations spanned national civilian government, defense, financial administration, public safety, healthcare, education, critical infrastructure, and other public sector functions.

What Is Driving the Rapid Shift Toward Sovereign AI?

The momentum is driven by clear strategic logic. More than three-quarters of government leaders, or 76.9%, agree that investing in sovereign AI enhances their agency's resilience against geopolitical risks and supply chain disruptions. This reflects a broader recognition that AI capabilities tied to national data and infrastructure offer protection in an increasingly fragmented global technology landscape.

The activation is already underway. Nearly half of respondents, or 46.1%, are actively evaluating sovereign AI technologies, while more than a third, or 36.1%, are running initial proofs of concept. Investment decisions are increasingly policy-led; more than half of government leaders, or 53.3%, cite alignment with national security and sovereign priorities as the top factor in technology investment decisions.

Governments are pursuing what researchers call "selective sovereignty," maintaining strong control over sensitive data, critical systems, and regulated workloads while continuing to leverage global technology ecosystems for innovation and scale. Hybrid sovereign models that combine on-premises infrastructure and sovereign cloud environments with broader ecosystem access are emerging as the preferred deployment approach.

Why Is the Skills Shortage Becoming a Bottleneck?

Despite strong strategic intent, APJ governments face acute workforce bottlenecks that risk constraining the transition from pilot to production. Nearly nine in 10 organizations, or 88.9%, report critical digital skills shortages, and more than half say these shortages are having a major impact on digital initiatives, significantly more so than the global average of 66.8%.

The hardest-to-hire roles map directly to sovereign AI readiness. These include AI safety and alignment researchers, data architecture and analytics professionals, sovereign data governance specialists, sovereign cloud architecture and operations specialists, and AI policy and governance specialists.

How to Build Sovereign AI Capability in Government

• Retain Direct Ownership: Governments should keep direct control of policy, governance, and data stewardship roles while partnering with trusted ecosystem providers for frontier AI specialization and delivery at scale, according to a recommended four-layer capability model.
• Prioritize High-Consequence Domains: Governments expect sovereign AI to deliver the greatest citizen benefit in national security and cyber-resilience (45.6%), justice and public safety (37.5%), financial and taxation (37.5%), public healthcare (34.4%), social services and welfare (32.2%), education (31.7%), and workforce development (31.1%).
• Prepare Governance Foundations for Agentic AI: Ninety-nine percent of leaders see agentic AI, or autonomous AI systems that can perform complex tasks independently, as an accelerator, with more than a third believing it will play a major role when paired with robust governance and oversight frameworks.

The research reveals that 99% of leaders see agentic AI as an accelerator, with more than a third, or 36.9%, believing it will play a major role and a further 62.1% expressing strong confidence in its potential when paired with robust governance and oversight frameworks. Only 1.1% remain uncertain.

"This research confirms what we're hearing from government leaders across Asia Pacific: the question is no longer whether sovereign AI matters, but how to operationalize it at national scale," said Nicole Jefferson, VP for global government affairs at Dell Technologies.

Nicole Jefferson, VP for Global Government Affairs, Dell Technologies

This confidence is driven in part by operational necessity. With nearly nine in 10 APJ government organizations reporting critical digital skills shortages, agentic AI is emerging as a practical workforce multiplier, capable of automating complex administrative and analytical tasks and enabling government teams to deliver more with the talent they have. In a region where technology is outpacing workforce capability faster than the global average, autonomous AI systems offer a path to close the gap between ambition and capacity.

Sovereign AI is increasingly functioning as the trust layer that unlocks the adoption of next-generation AI capabilities. By ensuring that agentic and generative AI systems operate within national policy, security, and auditability frameworks, governments can move faster precisely because the right controls are in place from the outset.

"Governments will only move at scale if they have confidence in the security, privacy, sovereignty and infrastructure foundations underpinning these systems," explained Ravikant Sharma, research director at IDC.

Ravikant Sharma, Research Director, IDC

Despite strong strategic intent, the gap between ambition and execution remains significant. Only 3.1% of respondents are investing significantly in sovereign AI so far, while only 1.7% say they have no plans to adopt it. This suggests most governments are still in evaluation or early pilot phases, with the real test coming as they attempt to scale from proof of concept to production deployment across their agencies.