Say goodbye to cloud ‘super vendor’ supremacy: Gartner

It’s the end of an era.

That’s the prediction Gartner Distinguished VP Analyst David Smith made about the cloud computing sector during an Oct. 21 panel at the 2026 Gartner IT Symposium/Xpo in Orlando, Florida.

According to Smith, the days of the Big Three hyperscalers having a chokehold across the broader industry will soon be over.

“What we are starting to see is the end of cloud super-vendor supremacy,” Smith said. “We’ve always looked at the hyperscalers—the AWS, Microsoft, Google of the world—and they’re not going away by any means, but the era of them being the center of everything is going to change.”

What’s driving this? There are a few factors contributing to the potential collapse of cloud super vendors. Smith said the rise of neoclouds, which are specialized cloud providers that cater specifically to AI workloads, are partly to blame.

“We believe you’re going to be using more cloud vendors, not less,” Smith said. “There’s going to be more providers from more areas, and some of them may grow up to be hyperscalers, but right now, most of them aren’t.”

Sovereignty concerns, which are on the rise due to geopolitical tensions, are another driver, according to Smith. Gartner predicts that by 2028, Chinese hyperscalers will be “seriously considered” by 20% of companies seeking out sovereign solutions.

Smith forecasts that over the next five years, organizations will use more than one cloud for larger applications: “They’re going to maybe use data trained in one place, inferred on another place, other kinds of things. It’s going to drive more demand for multi-cloud as a result of doing that.”

Cloud + AI. As cloud and AI become more intertwined, Smith said the industry can expect several changes, including a “financial reckoning” as hyperscalers continue to make large investments in AI.

“One or more of these hyperscalers we think is going to require some kind of a financial bailout as a result of what’s going on,” he said. (Gartner predicts that these bailouts will occur by 2028.)

Smith believes investments in AI will drive vendors to recover costs by either improving their end product, adding AI capabilities to existing services, or creating new services.

“We’re now seeing forward-deployed engineers, people being put on customer sites, to help make some of these things a reality,” Smith said. “We are seeing outcome-based pricing, outcome-based projects, which is not brand new, but really starting to pick up in this space.”

Still, Smith said, vendors will continue to struggle: “We believe that through 2031, these cloud providers are going to continue to raise prices on their traditional services to improve these massive investments.”

Cosmic data centers? There are currently several open questions regarding the future of cloud, one being whether or not data centers in space could gain traction. Smith said orbital data centers could potentially bypass current terrestrial challenges such as power and space constraints, but are expensive and will take time to pull off.

“If this is something you were looking at, I’d say this is more of a long-term type of thing,” Smith said. “It’s not something that’s going to happen overnight.”

Smith said the same goes for attempts to place data centers underwater: “Again, it sounds good and it has potential, but it’s not something that’s going to happen tomorrow.”