The rapid advancements in artificial intelligence are significantly driving the surge in cloud spending. Organizations are increasingly building, testing, and deploying AI platforms, which positions cloud services as the backbone of AI development and deployment. According to IDC, worldwide spending on public cloud services is forecast to reach $805 billion in 2024, with a five-year compound annual growth rate of 19.4%.

The emergence of generative AI has created new opportunities in the cloud market. While major providers like AWS, Microsoft Azure, and Google Cloud dominate the market, startups are developing GPU-based data centers tailored for AI workloads. This allows IT organizations to avoid vendor lock-in and leverage targeted AI projects, as these new platforms are often faster and more cost-effective than traditional options.

Many organizations are surprised by the actual costs of cloud services, which can be 2.5 times higher than anticipated. This often results from simply lifting and shifting legacy applications without optimizing them for the cloud. To manage these costs, organizations can utilize cloud cost management and optimization tools, which are experiencing significant growth and can help identify opportunities to optimize spending across hybrid and multicloud environments.