Sovereign cloud: Toku puts its AI customer-experience platform inside the UAE’s data border
Toku Ltd., a Singapore-headquartered AI-powered customer experience (CX) platform listed on SGX Catalist, has agreed with Core42 — a G42 company — to host its platform on the Core42 Sovereign Enabled Public Cloud in the United Arab Emirates. The two companies marked the agreement at a signing ceremony in Abu Dhabi on 2 October 2026, and Toku has begun onboarding its platform onto the environment.
The arrangement is enabling infrastructure rather than a customer win. The release names no UAE customer, no contract value and no term. What it does show is the shape of a market: as governments insist that citizen data and AI processing stay in-country, a sovereign cloud has become the entry gate to public-sector work — and Toku is using a credential it earned in Singapore to walk through that gate in Abu Dhabi.
What the agreement is
Core42 Sovereign Enabled Public Cloud combines Microsoft Azure infrastructure deployed inside the UAE with Core42’s sovereign controls — governance mechanisms, compliance monitoring and sovereign landing zones — overseen through an application called Insight. Core42 describes the result as sovereignty rather than mere residency: data stays within UAE borders, and Core42 maps national frameworks to more than 200 technical controls, with continuous compliance monitoring.
By hosting its CX platform there, Toku gains the in-country infrastructure it needs to serve UAE public-sector bodies and regulated enterprises that require customer interactions, recordings and platform data to remain under local jurisdiction. The platform handles voice, chat, email and digital channels, with AI capabilities including transcription, summarisation, sentiment analysis and conversation analytics. Contact centres sit at the sharp end of this. They handle personal data at volume — call recordings, identity details, payment information — and AI tools now transcribe, summarise and analyse those conversations. That combination of sensitive data and AI processing is exactly what residency rules target, which is why a CX platform cannot sell to a government that requires in-country processing unless it runs on in-country infrastructure. Toku processes multilingual interactions at enterprise scale, so the constraint is structural rather than incidental.
Why sovereign cloud is the gate
For governments and regulated industries, data residency is not a preference but a condition. Abu Dhabi has made that explicit: in March 2025, the Department of Government Enablement announced an agreement with Microsoft and Core42 to implement a sovereign cloud system capable of processing more than 11 million daily digital interactions, supporting the emirate’s ambition to become the world’s first fully AI-native government by 2027. Core42’s environment now supports more than 47 Abu Dhabi government entities, according to the release.
The stakes are commercial as well as regulatory. An IDC-backed Core42 and Microsoft whitepaper puts UAE public cloud spending on track to reach $6.47 billion by 2028 at a 21.7% CAGR, and forecasts global sovereign cloud spending nearly doubling from $133 billion in 2024 to $259 billion by 2027. For a vendor that wants to sell AI to governments, hosting on a sovereign cloud is not a differentiator on its own — but hosting outside one can be disqualifying.
Who Toku is
Toku is small but not new. Incorporated in Singapore in 2017, it listed on SGX Catalist on 22 January 2026, raising S$16.25 million at S$0.25 a share in an offer that was heavily oversubscribed. At listing it reported more than 150% net revenue retention, 47.4% revenue growth from FY2022 to FY2024 and a US$23.44 million order book, with operations across 34 countries. It owns its technology stack end to end, from carrier-grade connectivity to AI applications — an unusual position for a CX vendor, and the basis for its claim to handle complex, fragmented markets.
Its differentiator is regulatory and linguistic reach: in-country processing options, proprietary AI tuned for multilingual environments, and a deployment model that spans commercial cloud, private data centres and hybrid environments. That flexibility is what makes a sovereign-cloud partnership a natural next step rather than a pivot.
The Singapore-to-Abu-Dhabi template
The credential Toku is bringing is Singapore. It delivered the first large-scale contact centre on Singapore’s Government on Commercial Cloud, for the Inland Revenue Authority of Singapore (IRAS), serving the national taxpayer base with AI transcription and summarisation supporting agents and supervisors. The release frames Singapore’s GCC and Abu Dhabi’s sovereign cloud as sharing a principle: letting government entities keep data sovereignty while using hyperscale innovation.
That is a fair reading, and it is the reason the agreement is worth noting at all. A vendor that has run a national-scale government contact centre on a sovereign-controlled cloud has a reference that travels. The UAE, in effect, is following a path Singapore took — and Toku is positioning itself as the platform that already knows the route.
The commercial reality
The agreement itself is narrow. It is a hosting and onboarding arrangement with Core42, not a disclosed contract with a UAE government entity, and the release is candid that Toku is “participating in several public-sector tenders with partners in the region.” That phrasing matters: the tenders are not yet won, and the sovereign-cloud hosting is the precondition for bidding, not evidence of demand.
The company also frames the deal as supporting its Middle East expansion, one of the growth levers identified in its offer document, with coverage grown from two markets to eight since December 2025. Those are company statements from a recently listed company, and the release carries a forward-looking-statements disclaimer — a reminder that the Middle East story is a plan, not a result. The timing looks deliberate. Toku announced its UAE subsidiary and an Arabic-language AI partnership with SESTEK in September 2026, then followed with the Core42 agreement in October, building local capability before chasing local contracts. It has also moved early enough to help shape the ecosystem it will sell through, rather than arriving after the sovereign cloud market has settled around other platforms.
A contested market
Sovereign cloud is not Core42’s alone. Microsoft, AWS, Oracle and Google all market sovereign or sovereign-enabled offerings, and each courts governments across the Gulf and beyond. Core42’s advantage is that it is UAE-centric and Azure-based, with local jurisdiction and a compliance application tuned to national frameworks; its constraint is that it ties a customer to a single hyperscaler’s stack, however sovereign the controls around it. Core42 brings weight on the other side of the table. It is a G42 company, formed in 2023 from a merger of three G42 units, and it sits at the centre of the UAE’s AI ambitions — operating sovereign infrastructure for government entities and running an AI cloud for model training and inference.
For a vendor of Toku’s size, hosting on Core42 removes the burden of building sovereign infrastructure itself, an expensive undertaking that few software companies can justify in a single market. The regulatory backdrop gives the model its logic. The UAE sorts data into four levels — open, confidential, secret and top secret — and Core42 routes the first two to its sovereign public cloud while sending the most sensitive workloads to a dedicated private cloud. That structure tells vendors what they must satisfy before they can bid, and it explains why sovereign cloud is not a single product but a spectrum, and why hosting choice has become a procurement question as much as an engineering one.
For Toku, that creates a tension the company has already tried to manage: it markets itself as cloud-agnostic, with “infrastructure without boundaries” across commercial cloud, government cloud, private data centres and hybrid. Partnering closely with one sovereign provider in one market is a sensible way to enter that market — and a bet that the UAE relationship will not narrow its options elsewhere.
What to watch
For Toku, the test is whether the hosting agreement converts into named UAE government or regulated customers and disclosed contract value, and whether the Middle East contributes to revenue rather than to the pipeline. For Core42, the question is how many software partners it can attract onto its sovereign environment, since an ecosystem is what makes a cloud platform sticky. And, for public-sector buyers, the practical issue is whether sovereign hosting adds cost and friction without adding capability — the trade-off that sovereign cloud aims to dissolve.
What the announcement does and doesn’t establish
It establishes a hosting agreement, a named technology partner and a clear strategic rationale. It does not establish any UAE customer, contract value or term, and it does not show that Toku‘s Singapore credential converts into Gulf demand. Moreover, t is a positioning move by a small, newly listed vendor entering a market where data residency decides who may play. It also shows how quickly a sovereign cloud becomes the default condition for selling AI to a government — not a feature, but a licence to operate.
The honest summary is that Toku has done the necessary thing to compete in the UAE’s public sector — put its platform inside the data border. Whether that permission becomes revenue depends on tenders it has not yet won, and on a sovereign-cloud market that is only getting more crowded.
Editor’s Note: This article draws on the company’s announcement and public materials, including Toku’s offer document and results, plus Core42’s product and whitepaper material, the Abu Dhabi Department of Government Enablement announcement and independent sovereign-cloud market data. The IRAS deployment framing and the Middle East expansion are company-reported, no UAE customer or contract value is disclosed, and the release carries a forward-looking-statements disclaimer. No interview was conducted. See the source list in the publication package.