Insight warns of cloud waste amid AI cost pressures

Insight has launched its Digital Sovereignty Trilemma report, which examines cloud waste, AI-related cost pressures and digital sovereignty across Europe.

The study found that organisations waste an average of 24% of their annual cloud capacity. Based on average annual cloud spending of €3.75 million, that equates to about €901,000 in lost spend each year.

Almost half of organisations across EMEA spend up to €5 million a year on cloud services. The report argues that idle capacity is limiting investment in AI platforms, data sovereignty controls and infrastructure resilience at a time of rising hosting costs.

Three Pressures

The report outlines a digital sovereignty trilemma, describing three pressures organisations must manage as AI adoption grows: economic efficiency, operational resilience and data sovereignty.

On efficiency, the study points to unused cloud capacity as a drain on budgets. On resilience, 47% of organisations over-provision infrastructure to guarantee availability. On sovereignty, stricter demands around data residency and AI governance are pushing workloads towards dedicated or sovereign platforms.

It also says AI is driving a 12% year-on-year increase in hosting costs. At the same time, 67% of organisations already view digital sovereignty as a critical strategic priority, a figure expected to rise to 82% within three years.

The research also identifies the main causes of inflated cloud spending: 47% of organisations struggle with limited visibility into their cloud estates, 47% over-provision infrastructure and 46% retain inactive resources.

Cost Discipline

More than half of organisations do not carry out total cost of ownership assessments before making major workload decisions. The report found that 56% skip those assessments, while 41% remain constrained by legacy applications that make it harder to rebalance and optimise their cloud environments.

These findings come as businesses reassess workload placement amid growing AI demand. According to the study, 85% of organisations are already evaluating or deploying dedicated infrastructure for AI.

Gernot Hofstetter, Co-CEO, Yorizon, said: "Insight's Digital Sovereignty Trilemma reflects the reality many European organisations now face: sovereignty, resilience and cost efficiency often pull in different directions. Without deliberate infrastructure design, organisations risk lock-in at a time when digital foundations are increasingly linked to economic and societal stability."

The report places particular emphasis on the UK, where concern over digital sovereignty appears to be rising quickly. It found that 78% of organisations in the UK currently view digital sovereignty as important, rising to 90% within the next one to two years and 94% over the longer term.

This suggests digital sovereignty is shifting from a policy consideration to an operating requirement for many UK businesses. As cloud use expands and AI adds to infrastructure costs, organisations are re-examining whether workloads are in the right locations for cost control, resilience and governance.

Insight's findings add to a wider debate among European businesses over the trade-offs in cloud-first strategies. While cloud adoption has delivered flexibility and speed, the report argues that inefficient usage, unused capacity and governance requirements are creating financial and operational strains that are becoming harder to ignore.

In practice, businesses face choices over whether to stay with public cloud models, move some workloads into hybrid setups or shift selected applications onto dedicated platforms. The study suggests these decisions are now driven not only by performance or price, but also by regulation, data control and the cost of preparing infrastructure for AI.

Adrian Gregory, President of Insight EMEA, said: "Organisations are wasting nearly a quarter of their cloud capacity just as AI is pushing infrastructure costs sharply higher. To scale AI sustainably, infrastructure must be treated as a strategic asset - reducing waste, applying rigorous TCO discipline and deliberately balancing performance, sovereignty and long-term economic efficiency."