AI workloads are increasing wasted cloud spend for the first time in 5 years – but AI governance teams might be a solution

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AI and cloud spend are up, but companies might not be expanding as efficiently as they could be, leading to wasted resources.

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A graphic image of a cloud set in a digital background. — (Image credit: Shutterstock/ZinetroN)

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AI adoption continues to rise, and companies are expanding cloud to adapt
Cloud waste has risen for the first time in five years
Unified teams can be more focused, leading to less waste

According to Flexera, 85% of businesses still see managing cloud spend as a top challenge, except artificial intelligence is causing them to spend more than ever before on cloud services.

Four-fifths (81%) now use AI, up from 47% in 2024, and it's driving waste at the same time. In fact, cloud waste has risen to 29%, marking the first increase in five years, and Flexera's blaming it on AI.

Cloud waste can be caused by any number of factors, including unused VMs and databases, extra computer, storage or memory, old backups and more.

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AI and cloud bills are rising

At this point, three-quarters (76%) of large enterprises are now spending upwards of $5 million in cloud every month, while 73% are operating multicloud environments whereby they're paying for cloud and the hardware that goes into fueling their on-prem environments.

"We’ve moved beyond treating the cloud as a cost-cutting exercise and now see it as the essential foundation for growth and the engine that allows us to turn ideas into global products," CTO Brian Shannon wrote.

The report's data also quantifies the dominance of US hyperscalers, with AWS (83%) and Azure (79%) leading way ahead of Google Cloud, which itself is steps ahead of others.

Things could be about to change for the better, though, with 71% now operating a Cloud Center of Excellence (CCOE) increasing collaboration between FinOps, business units and software assessment management (SAM) teams.

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With a CCOE in motion, companies can benefit from central governance, consistent standards and better cost control, therefore leading to a more unified approach to AI and cloud – driving down costs and eliminating waste.

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Craig Hale

With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!

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