The rise of artificial intelligence (AI) is fueling new waves of innovation across Europe, but many companies are struggling with the less-publicized side of this technological revolution: cloud costs.
Our latest report reveals that increasing cloud bills are acting as a significant barrier to AI innovation. The report, which examines how European organizations are deploying generative AI models and machine learning, shows that companies are forced to make tough decisions due to the rapid escalation of operational expenses.
Financial Impact and Innovation
According to the study, 45% of European organizations are spending more than 30% of their annual IT budget on cloud services. This level of expenditure is causing many to rethink their technology strategies, with one in three companies stating they are slowing down the development or deployment of AI solutions because of high costs.
While migrating to the cloud has offered benefits in terms of scalability and flexibility, it’s become clear that many executives underestimated the associated costs, especially when dealing with intensive workloads like AI.
Emerging Strategies and Rethinking the Cloud
Many organizations are beginning to review their cloud architectures and consider new infrastructure options to cut costs without sacrificing performance. This includes relocating certain workloads from centralized environments to more distributed solutions or edge computing.
Interest is also growing in hybrid and multi-cloud models as ways to optimize costs, performance, and regulatory compliance. These strategies are particularly prominent in sectors such as financial services, healthcare, and manufacturing, where cost efficiency and data privacy are top priorities.
A European Approach to AI
The report also highlights how European companies are adopting a more measured, regulation-focused approach compared to their American counterparts. With initiatives like the upcoming EU AI Act, many organizations are working to embed principles of privacy, transparency, and security into their deployments from the ground up.
The Future of AI Requires New Cloud Thinking
What’s clear is that to unlock AI’s true potential, European companies need to rethink how and where they run their workloads. Cost optimization in the cloud is not just a financial issue; it’s a critical barrier that must be addressed to advance next-generation innovation.
For our part, we aim to help organizations explore more efficient alternatives through distributed cloud computing solutions that deliver higher performance, enhanced security, and cost savings.
By Ari Weil, Vice President of Product Marketing at Akamai Technologies