Enterprise AI Shifts to Private Cloud Due to Cost and Security Concerns, Broadcom Report Finds

Broadcom's "Private Cloud Outlook 2026" report, subtitled "The AI Tipping Point," reveals a growing trend among enterprises to move their production AI workloads to private cloud infrastructure. This shift is primarily motivated by concerns over cost, security, and the need for greater control and scalability.

The report, which surveyed 1,800 senior IT decision-makers globally, found that cost has surpassed security as the top public cloud concern. 31% of respondents cited cost management as a leading challenge, an increase from 26% in 2025. Furthermore, 97% of IT leaders believe some portion of their public cloud spending is wasted, with 52% estimating this waste exceeds 25%.

Security, data sovereignty, and governance are also significant factors driving private cloud adoption for enterprise AI. The study noted that 83% of enterprises are either considering or have already repatriated workloads from public to private cloud, with 50% having already done so. This marks the first time AI appeared as a repatriation category in the study.

Broadcom links these findings to the pressures of AI infrastructure, including compute, storage, bandwidth, GPU pricing, data movement fees, and unpredictable usage patterns. The company emphasizes that the AI experimentation phase is over, and private cloud is becoming the preferred option for deploying enterprise AI workloads securely and at scale.