Sovereign AI could be a boon for major telcos – report

• Many companies, countries and regions are adopting sovereign strategies
• AI and cloud infrastructure and services are at the heart of many of these plans
• Large telcos are well placed to capitalise on this trend, according to credit rating agency Morningstar DBRS

Major telcos are “well positioned” to benefit from the increasing trend towards national and regional digital sovereignty strategies, according to a recent document published by Morningstar DBRS, the world’s fourth-largest credit rating agency. 

The agency was prompted to publish its ‘commentary’ following the Canadian government’s recent announcement that its federal budget would include almost CAN $926m of spending over the next five years to support the development of sovereign public AI infrastructure and plans to embed AI technology more deeply in federal government operations. 

The Morningstar DBRS team noted that “most developed economies have announced sovereign AI plans” in recent years to help support long-term economic growth and that “there is ample scope for [telcos] to contribute to building sovereign AI ecosystems and participate in the development and application of AI technologies… given their technological expertise, resources and reputation as trusted partners for mission-critical applications.” 

It added: “[Telcos] that capitalise on sovereign AI plans will be best positioned to capture the enterprise/government market share as this part of the industry is set to expand meaningfully over the next five years,” the agency noted. 

Scott Rattee, senior VP and team lead for corporate ratings at the agency noted that telcos’ “core competence positions them well to integrate and build facilities and high-speed fibre networks to support sovereign AI development.” 

Those network core competencies will be vital, stated the agency in its commentary note. Telcos “are already responsible for the design, construction and maintenance of communications networks, representing a critical piece of modern infrastructure that is already compliant with laws and regulations of the local, regional and/or national jurisdiction and that align with cultural norms. As a result, both long-term government relationships and operations within the pre-existing regulatory framework position telecoms as a trusted partner in the development and ongoing operations of highly sensitive sovereign AI infrastructure,” it explained. 

Many telcos are, of course, already on the case. In Canada, for example, both Bell Canada and Telus have been invested in AI infrastructure and service development for a couple of years already – see Buzz weaves its way into Bell AI Fabric and Why Telus is building an AI factory.

In Europe, recent developments have centred on the efforts of Deutsche Telekom and Orange to light a fire under the region’s digital sovereignty efforts as well as invest themselves in the infrastructure that will support such developments, including DT’s Deutschland stack and Orange’s decision to shift most of its B2B division’s IT systems to a sovereign cloud platform – see CEOs of DT and Orange issue digital sovereignty call to action.

Fastweb+Vodafone has already launched “sovereign AI-based solutions” following its investments in an AI factory, while its parent operator, Swisscom, has already developed a sovereign AI assistant for its domestic market having begun its sovereign AI infrastructure investments in early 2024.  

In France, Iliad’s cloud services division, Scaleway, has been expanding and extending its sovereign services reach recently, while Iliad’s datacentre joint venture OpCore is involved in a major sovereign AI infrastructure development near Paris following a recent collaboration with French state-owned energy giant EDF.    

And in Norway, Telenor has been benefitting from its early entry in the sovereign AI services sector. 

Of course, there are many more examples, including this one involving Telenor Pakistan, and some of these will be discussed during TelecomTV’s Digital Sovereignty Forum in London on 3 December – if you can make it, come and join in.    

- Ray Le Maistre, Editorial Director, TelecomTV