Microsoft & Core42: Sovereign Clouds Crucial for AI Era

Microsoft and Core42—a G42 company specializing in AI infrastructure, sovereign cloud, and digital transformation—have jointly published a whitepaper titled “Balancing Innovation and Compliance in the AI Era: Core42 Sovereign Public Cloud Leveraging Microsoft Azure.” The paper explores the transformative role of sovereign public clouds in enabling secure, innovative, and regulation-compliant digital growth in the UAE. It offers strategic guidance and actionable insights for technology leaders navigating the adoption of these advanced cloud solutions.

The Strategic Importance of Sovereign Cloud Infrastructure

Sovereign public cloud platforms are essential for maintaining data control within national borders, helping organizations comply with local data protection laws. This is especially critical for managing sensitive information such as financial records, PII (personally identifiable information), and intellectual property. These clouds also enhance cybersecurity by embedding strict encryption protocols and limiting access to data, especially from foreign entities, thus offering organizations greater control over their digital assets while aligning with legal mandates.

Local Empowerment Through Digital Autonomy

Beyond legal compliance, sovereign clouds promote national resilience by strengthening domestic digital infrastructure, fuelling homegrown innovation, and reducing dependency on international cloud service providers. Despite these regulatory safeguards, sovereign clouds still deliver the performance, scalability, and cost advantages of traditional public cloud models, proving that security and flexibility can indeed coexist.

Bridging Innovation and Regulation: Use Cases from the UAE

A key takeaway from the whitepaper is that the modern sovereign-enabled cloud removes the traditional conflict between innovation and regulation. It showcases real-world UAE-based applications such as AI-driven fraud detection in the financial sector, predictive diagnostics in healthcare, protected citizen data in public administration, and energy sector analytics. These examples highlight how sovereign infrastructure can support advanced digital capabilities without compromising compliance.

Driving National Digital Ambitions Through Cloud Technology

The paper underscores how adopting a sovereign cloud framework empowers UAE-based organizations to innovate confidently, in alignment with national strategies. The UAE’s forward-looking digital vision includes ambitious initiatives like Abu Dhabi’s goal of becoming the first fully AI-native government by 2027. With data sovereignty and national security embedded in the core of its digital evolution, the UAE is setting a precedent for AI-era governance and infrastructure.

Sovereign Cloud Adoption Accelerates Globally

According to the whitepaper, global investment in sovereign cloud solutions is accelerating rapidly, forecasted to nearly double from $133 billion in 2024 to $259 billion by 2027. This surge signals a global shift in prioritizing data sovereignty as an essential component of national and enterprise-level technology strategies.

Sherif Tawfik, Chief Partnership Officer – AI & Cloud for Sovereignty, Microsoft, reiterated Microsoft's unwavering commitment to supporting the UAE's ambitious vision of becoming a global leader in digital transformation. “The Core42 Sovereign Public Cloud, powered by Microsoft Azure, exemplifies our dedication to providing secure, compliant, and innovative cloud solutions that meet the unique needs of regulated industries in the UAE. By leveraging Microsoft Azure, we are providing a robust, secure, and compliant cloud infrastructure that empowers UAE organizations to harness the full potential of AI and cloud capabilities to innovate and accelerate their digital transformation journey while ensuring data sovereignty and regulatory compliance.”

Adrian Hobbs, Chief Technology Officer, Core42, highlighted the significance of the partnership between Core42 and Microsoft as a testament to their shared commitment to driving digital innovation while ensuring compliance with local regulations. “The Core42 Sovereign Public Cloud, powered by Microsoft Azure, which leverages our sovereign control platform, Insight, is designed to meet the unique needs of regulated industries. This initiative aims to enable businesses to achieve their digital ambitions securely and in compliance with regulatory requirements. Our collaboration with Microsoft ensures that we provide a cloud environment that fosters innovation while upholding the highest standards of data sovereignty and regulatory compliance. We are proud to contribute to the national journeys towards becoming global technology leaders.”

Microsoft and Core42: Pioneering Sovereign Cloud in the UAE

The collaboration between Microsoft and Core42 plays a critical role in supporting the UAE’s digital transformation agenda. A recent milestone was the signing of a major agreement with the Abu Dhabi Government to build a sovereign cloud infrastructure. This initiative will support over 11 million digital interactions daily across government services, streamlining operations and fostering innovation at scale.

Empowering Regulated Industries with Secure Cloud Solutions

At the heart of this collaboration is the Core42 Sovereign Public Cloud, powered by Microsoft Azure and integrated with Core42’s proprietary “Insight” compliance platform. This solution is designed specifically for highly regulated sectors, offering a secure and innovative environment that respects local regulatory requirements. The partnership exemplifies a shared commitment to empowering organizations with cutting-edge technology while maintaining strict adherence to national and industry-specific compliance standards.

For more detailed insights on sovereign enabled public clouds, read the white paper: https://core42.ai/balancing_innovation_and_compliance_in_the_ai_era/