AI drives wasted cloud spend higher despite FinOps gains

Wasted cloud spending has climbed to 29%-the first increase in five years-as more organisations deploy generative AI in day-to-day operations and face heavier governance and security demands.

The figure comes from Flexera's 2026 State of the Cloud Report, based on a global survey of more than 750 cloud decision-makers and users. The results suggest a widening gap between improving cloud management practices and the budget and control pressures created by AI-driven workloads.

Cloud spending remains a top concern for IT leaders: 85% of respondents cited managing cloud spend as a key challenge. At the same time, FinOps is becoming more established. The survey found that 63% now have FinOps teams, and 64% reported measurable value delivered to business units.

FinOps Maturity

The report suggests organisations are moving beyond basic cost tracking toward broader governance and performance measurement, with increasing centralisation. About 71% reported operating a Cloud Centre of Excellence, typically used to set standards and coordinate cloud usage across business units.

Oversight is also spreading across a wider set of stakeholders as environments grow more complex and costs rise. FinOps teams, business units, and software asset management groups are increasingly involved in cloud decision-making.

Infrastructure choices are adding to that complexity. Hybrid remains widespread, with 73% of organisations reporting environments that combine on-premises and cloud systems. Multi-cloud adoption also continues to increase.

Some multi-cloud use reflects factors other than deliberate architecture planning, including mergers, SaaS sprawl, and decentralised teams. These trends can leave organisations with overlapping services and less consistent policy enforcement.

AI Workloads

Generative AI adoption continued to rise sharply. In the survey, 81% of respondents said they use generative AI, up from 72% last year and 47% in 2024. Nearly half (45%) said they use it extensively, compared with 36% in 2025.

The shift from pilots to production has direct cost implications. AI workloads are often variable, data-intensive, and difficult to forecast, complicating budgeting and chargeback. The report links the return of rising waste to this changing workload mix and the pace of adoption.

Security and compliance is the leading challenge for cloud-based AI: 53% of cloud leaders cited it as their top issue for AI initiatives. Data quality for model training followed at 40%.

Governance structures are shifting in response. The report found that 47% of large enterprises have created dedicated AI governance teams or roles, reflecting the need for formal oversight as AI services spread and more staff gain access to AI tools through cloud platforms.

Brian Shannon, Flexera's Chief Technology Officer, said the findings reflect a change in how organisations evaluate cloud outcomes.

"Cloud is maturing and visibility across technology is increasing," said Brian Shannon, Chief Technology Officer, Flexera. "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. That shift requires bringing FinOps, IT asset management and governance together. As AI is reshaping cloud economics and risk, having centralized oversight is more critical than ever."

Provider Concentration

Public cloud usage remains concentrated among a small number of providers. The survey found AWS was used for active enterprise workloads by 83% of respondents, slightly ahead of Azure at 79%. Google Cloud Platform ranked a distant third.

Spending also continues to rise, especially among larger organisations. More than three-quarters of large enterprises (76%) reported monthly cloud spending above USD $5 million. The report ties the upward trend in public cloud spending closely to company size.

Services Shift

The report also points to changes among managed service providers (MSPs). MSPs remain a common option for organisations dealing with operational complexity, but customers are keeping more direct ownership of governance and cost accountability.

In the survey, nearly half of MSPs said they plan to offer AI consulting and SaaS management services. Two-thirds said they are adopting AI for cybersecurity, suggesting security services are evolving alongside broader AI adoption in cloud environments.

The report argues that disciplined oversight and value measurement are increasingly separating organisations that can manage rising cloud complexity from those that struggle with cost and risk as AI use scales.