GenAI development is pushing along cloud adoption at a record pace

• Nutanix report claims data privacy and security are pushing companies to invest more
• $57.3bn spent on compute and storage infrastructure in Q3 2024
• 90% of firms expect costs to rise, but 70% are hopeful for an ROI in the next 2-3 years

Sky-high rates of GenAI adoption are leading to sky-high rates of cloud adoption, a new report by Nutanix has claimed, saying four in five (80%) organizations have already implemented a generative AI strategy.

The study found the majority (94%) of respondents agree their organization now benefits from adopting cloud-native applications and containers, with nine in 10 (90%) reporting that at least some applications are containerized.

However, Nutanix flags the usual suspects when it comes to what’s holding businesses back, and that largely boils down to their existing IT infrastructure.

GenAI and cloud go hand-in-hand

Central to the discussion around cloud adoption is security, with nearly all (95%) respondents citing security and privacy as a primary concern with generative AI. Nine in 10 (90%) subsequently prioritized data privacy when they implement GenAI solutions, but even more (95%) believe that they could do better.

“Many organisations have reached an inflection point with GenAI implementation and deployment,” said Nutanix's SVP for Product and Solutions Marketing, Lee Caswell. “To successfully unlock ROI with GenAI projects, organisations need to take a holistic approach to modernising applications and infrastructure and embrace containerisation.”

Given that an overwhelming majority (98%) of respondents face challenges when it comes to scaling generative AI workloads, IT infrastructure was chosen as the number one area for investment in order to support AI.

When global cloud spend hit $78.2 billion in Q2 2024, up 19% year-over-year, Canalys VP Alex Smith commented: “Hyperscalers hope that AI-powered services become the next compelling reason for customers to transition to the cloud.”

Later, in Q3 2024, IDC found that spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 115.3% year-over-year in the three-month period, accounting for $57.3 billion.

“Cloud infrastructure spending growth continues being driven by accelerated servers related investments that not only aim to cover AI initiatives but also support large HPC projects that were unveiling recently,” said Juan Pablo Seminara, Director for IDC's Worldwide Enterprise Infrastructure Trackers.

Half (52%) also believe IT training is necessary, with 48% suggesting that hiring new talent could help.

The foundation work sounds expensive, and for many (90%), IT costs are expected to rise, however there is plenty of hope that the expenses could be worth it, with 70% expecting to make a return of their investment within the next two to three years.

On a more personal level, more than half (53%) of respondents believe that GenAI advancements will provide them with an opportunity to become an AI expert.

You might also like

• We’ve listed the best cloud computing services with access to powerful chips
• Gen AI interest is helping push cloud investment to a new high
• Check out the best AI tools and best AI writers