Cloud 2026: The shift to AI driven, sovereign and hyperconnected digital ecosystems

A decade ago, moving to the cloud was seen as a simple upgrade to help companies work faster, scale easily and reduce costs. But in the last few years, things have changed. Many companies now feel exasperated with the cloud because it can become expensive or complicated if not planned well. Gartner notes that by 2028, one in every four organisations is expected to experience “significant dissatisfaction” with “unrealistic expectations, suboptimal implementation and/or uncontrolled costs” with their cloud adoption.

The world of technology itself has changed deeply. With Artificial Intelligence (AI) moving from small projects to business-level decisions, its training and growth now depend on the flexible and distributed nature of cloud systems. And edge computing, once a fringe concept, is now powering operations from store shelves to factories. Cloud, AI, and connectivity are now merging into one digital fabric that requires a more thoughtful and strategic business approach.

As this change speeds up, companies are moving beyond using these technologies separately and are starting to combine them wisely. It shows that digital progress is no longer about how big the infrastructure is, but how well everything works together to give smart solutions, strong security, and smooth operations across different environments.

Strategy over speed

Recent discussions about digital change have focused on how fast new technology can be adopted, but the real aim should be smart integration and better use of data. Companies must think about how their digital systems connect to create the most value, using data as an important resource that is collected, analysed, and linked across all parts of their operations.

In India, with its ‘hyperconnected’ infrastructure, this means using edge computing for real uses like smart factories, logistics hubs, automated retail, telecom networks, and smart cities. These depend on the rising number of IoT devices that generate large amounts of detailed data. Success depends on how well companies combine computing power, connectivity, and smart technology into scalable AI systems that can work with older setups and solve compatibility issues.

The cloud is no longer just a place to store information; it is now the centre for decision-making and innovation, supporting AI applications that are not just widely available but also helpful for day-to-day needs, transforming personalised education, telemedicine, manufacturing, and public services.

Why the Acceleration of AI-Driven Ecosystems Matters

AI is moving from small experiments to being used across entire companies, changing how they work on a large scale. As AI expands in manufacturing, finance, retail, healthcare, and public services, strong and future-ready infrastructure becomes essential. To support this, industries are focusing on large-scale computing power, going beyond experiments to real, production-level use. This shift is also strengthened by increasing cooperation between the government and industries, making India a strong starting point for new AI innovation and inclusive digital growth.

As data becomes the base of digital economies, countries are focusing on digital sovereignty to ensure data safety, privacy, and compliance with national rules. In India, this is encouraging new sovereign cloud models that allow organizations to store and manage data within the country. These models increase trust and strength across public and private sectors. But balancing sovereignty and innovation is important. Policies must protect sensitive data while also supporting global collaboration, agility, and access to advanced technologies needed for economic growth.

India’s Leadership in AI Infrastructure

India is not just planning; it is making real progress. Programs like Digital India, India Stack, and the National Data Governance Framework have created a strong base for trustworthy and inclusive AI. According to IBEF, even though India currently holds only about 3% of the world’s data centre capacity, it produces around 20% of the world’s data.

With fast growth in 5G, AI and IoT, India’s data centre capacity is expected to double by 2026 with a $6 billion investment. This is building the core infrastructure for a digital economy that benefits everyone.

The India AI mission is also bringing government and industry together, linking cloud, edge, and network partners. This helps India skip older tech models and focus on shared computing that is available on demand and can support global AI needs. By building scalable shared platforms, India is shaping cooperative digital governance and strong AI systems.

India’s digital growth is supported by major infrastructure investments. New estimates suggest that spending on data centres and AI infrastructure could cross $100 billion by 2027. This is not only about meeting rising demand; it shows that India is pushing forward with purpose, encouraging innovation, enabling new business models, and creating opportunities across sectors.

The convergence of cloud, connectivity, and AI is changing everyday life, improving access to education, enabling predictive healthcare, transforming manufacturing, and upgrading public services. With programmable networks and unified platforms, digital experiences are becoming stronger, quicker, and smarter for people, businesses, and communities.

The path forward: Integration as the new normal

By 2026, India’s digital investments, supportive policies, and bold vision will come together to create real, AI-driven value across the nation. This change goes beyond basic tech upgrades; it represents social and economic transformation. The impact includes wider access, stronger governance, and new standards for intelligent public services that react instantly to citizen needs.

The organizations that succeed will be those that see integration as a strategy, not just a task. Success will go to companies that build connected ecosystems where cloud, connectivity, and AI work together as parts of a single system. This will form the base for India’s digital future and its competitive role in the global AI economy.

(Views are personal; the author is Executive Vice President – Cloud & Cybersecurity Services at Tata Communications)