At least for the US government, that's not going to happen. The government controls the servers is a non-negotiable contract term. We even have our own AWS regions for US government work.
Nah, that's looser than you think. Contractors deploy to the government cloud regions on AWS and Azure all the time. There's no reason GitLab can't become a qualified contractor and gain access.
The government cloud regions are way more about meeting compliance with all levels of FedRAMP and DoD requirements. Such as exclusively only US Citizens may access the systems even on the cloud hosts staff (so no foreign/remote/visa employees) and a whole list of other requirements both big, small and annoying (like FIPS) that affects everything from software to the physical building.
GitLab has already confirmed in comments here that removing self-hosted isn’t something they’re going to do.
That said, as you note yourself, the government is perfectly fine w/ not controlling the servers. GitLab could offer single-tenant (or heck, even multi-tenant) SaaS in AWS GovCloud and sell to government customers.
I bet differently. Gov CIOs are being forced to adapt to rapid business solutioning and minimal overhead. It takes years to operationalize a Gitlab instance, and then requires permanent O&M less adaptive to IT cultural shift.
Gov IT leaders will move to Gitlab SaaS overnight, once it's FedRAMP approved and migration is enabled through a click of a button.
Maybe less favorable for AWS and their contracts oriented to long-term gov owned compute.
There’s plenty of people that want dedicated deployments without having to manage the details of the deployment and upgrades. Especially those that already run their core on one of the target cloud platforms.