Neoclouds set to capture 20% of AI cloud market by 2030

Neocloud providers will capture 20% of the US$267 billion ($388.8 billion) AI cloud market by 2030, Gartner has predicted.

Neoclouds, or cloud environments built specifically for AI and high-performance workloads, are experiencing rapid growth as demand for AI expands. Australian neoclouds such as Sharon AI and Firmus Technologies are building AI-focused, locally hosted infrastructure to support this demand.

Gartner senior director analyst Enrique Castera said the new wave of specialised neocloud providers is gaining significant traction even as US hyperscalers launch their own sovereign offerings.

“These neoclouds are differentiated by their focus on AI-optimised infrastructure and high-performance workloads. Some also focus on sovereign cloud capabilities, ensuring data and operations remain within specific jurisdictions,” he said. “Sovereign neoclouds provide contractual guarantees 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.”

Enterprises are under pressure to meet increasingly strict data sovereignty requirements, and a number are turning to neoclouds to meet these demands, according to Gartner. Meanwhile neoclouds are offering superior performance on AI workloads and flexible deployment models compared to hyperscale offerings.

“The AI cloud market is entering a new phase where sovereignty, performance and infrastructure specialisation are becoming primary decision factors for enterprises. As demand for GPU-intensive workloads accelerates and traditional cloud models struggle to keep pace, it is creating the conditions for a new class of providers purpose-built to deliver AI infrastructure at scale,” Castera said.

Gartner is recommending that infrastructure and operations and other IT leaders diversify beyond traditional hyperscalers by evaluating neoclouds’ ability to access high-performance AI infrastructure and limited GPU capability.

Organisations should also be looking to adapt their financial and risk management strategies while implementing technical controls to ensure data sovereignty, compliance and operational resilience, Castera said.

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