The debate around digital sovereignty has often been miscast as a physical infrastructure issue, forcing a false choice between independence and global participation.
Stephen Karam, a Partner at Levio, argues that true sovereignty is not about building walls but about implementing layers of control, governance, and intelligence.
Karam explains that strategies like quantum encryption and "policy keys" allow nations to retain independence while operating on global platforms in a "brains over billions" approach.
One of the primary obstacles to an effective digital sovereignty strategy is a fundamental misunderstanding of the term itself. The debate is frequently miscast as a physical infrastructure project, but that framing ignores a messy reality where ‘sovereignty’ means one thing at the political layer and something entirely different at the engineering or policy layers. The confusion can lead to a default, reactionary posture, where the impulse to build walls is economically unfeasible and forces a false choice between national independence and global participation.
Stephen Karam is a Partner at Levio, a global digital transformation consulting firm, where he leads the Canadian Public Sector practice. With over 30 years of experience collaborating with more than 40 government departments and agencies on major transformation projects, Karam is at the forefront of digital government and AI solutions. He says the entire conversation needs a fundamental reframing.
"True digital sovereignty isn’t about building walls or owning every data center. It’s about controls, governance, and intelligence that let a nation remain independent while still collaborating globally," says Karam. He explains that nations must move away from seeing digital sovereignty as strictly a physical infrastructure issue and adopt a "mental model of what the stack is": a framework built on layers of interoperability, security, data, and intelligence. By prioritizing levers of control over physical location, nations can achieve their goals without significant isolation.
Keys to sovereignty: Karam points to quantum encryption and fragmentation as a key but often overlooked area. "If you hold the keys to your encryption, you can remain sovereign while still operating on global hyperscalers. You can have mirrored data in any country and still retain sovereignty." This move in strategy from ownership to control allows a country to "achieve sovereignty without having to spend the billions of dollars and the many years in creating this physical sovereign ecosystem."
For middle powers like Canada, Karam says this strategy represents a key path forward. Middle powers aren't positioned to outspend superpowers like the US and China, making innovation in governance and policy their true competitive edge. He says the countries that innovate around sovereignty are the ones that will win the AI race and harness its full potential responsibly.
Achieving that goal requires a focus on "sovereignty intent," which proactively uses these strategies to build economic growth and national trust, moving beyond simple protectionism. Karam notes that the challenge is rooted in communication. The abstract nature of a 'sovereignty stack' is simply harder to explain than a physical data center.
Clarify the message: "The mental models are stuck at the physical layer. We as humans think that if we can't touch it or claim it as our own domain, then it's not sovereign. That's the layer of abstraction where we're losing a lot of people, especially because it's so highly politicized. You have to make the message very simple for a minister to deliver to the media."
Policy as power: To navigate this reality, Karam proposes a novel governance tool that mirrors its technical counterpart, opening new forms of international cooperation grounded in different national strategies and shared infrastructure. "Just as we have keys for quantum encryption, you can also have a 'policy key,'" Karam says. "It ensures data will only work if you actually have that key, because you have to ensure its flow and use is as intended."
Foundations, not factions: "This is where proper diplomatic discourse is required, so that we’re creating foundations, not factions." Sovereignty strategy only works if it strengthens shared rules of engagement rather than hardening national silos. The goal is to build interoperable governance models that allow countries to assert control while still participating in coordinated global systems, especially in areas like AI research, cybersecurity, and critical infrastructure.
For Karam, building these global foundations extends beyond geopolitics, offering a way to collaborate on significant global problems. But that opportunity, in the context of the move towards protectionism, creates a kind of paradox that we need to move beyond. "Think of the global effort in cancer research. How do we accelerate real change in the world if all we're trying to do is be sovereign?" concludes Karam. "We're racing to build walls in our minds precisely when AI has bestowed upon us an unprecedented global opportunity."
