Broadcom 2026 Survey: Cost Overtakes Security as Top Public Cloud Concern

Broadcom has released its Private Cloud Outlook 2026 report, highlighting a significant shift in enterprise AI deployment strategies. According to the survey, organizations are increasingly moving production AI workloads to private cloud environments as concerns about cost, governance, security, and data sovereignty reshape infrastructure planning.

The report suggests the enterprise AI market has moved beyond experimentation, with production deployments driving infrastructure decisions. While the public cloud remains important for AI development and testing, many organizations now prefer the private cloud for large-scale AI inference workloads.

A key finding shows that 56% of enterprises are either running or planning to run production AI inference on private cloud infrastructure. By comparison, only 41% expect to run those workloads in public cloud environments, down from 56% a year earlier. The 15-point decline is among the most significant year-over-year shifts identified in the study.

Broadcom notes that enterprises increasingly associate production AI with higher infrastructure costs, stricter governance requirements, and greater operational complexity. Survey respondents identified data protection and privacy (37%) and security and control (36%) as the top new demands AI is placing on IT organizations.

Cost Pressures Drive Reassessment of Public Cloud

The report also points to growing dissatisfaction with public cloud economics. For the first time since Broadcom began tracking the data, cost has overtaken security as the leading concern associated with public cloud adoption. Thirty-one percent of respondents cited cost as their primary concern, up from 26% in the previous year’s survey.

Nearly all surveyed IT leaders (97%) reported that some portion of their public cloud spending is wasted. More notably, 52% estimated that more than one-quarter of their public cloud budget fails to deliver expected value.

These concerns are driving workload repatriation initiatives. Eighty-three percent of enterprises are evaluating moving workloads from public cloud environments back to private cloud infrastructure, while half of respondents have already completed some level of repatriation.

Security and compliance remain the primary drivers of repatriation efforts, cited by 51% of respondents. Cost predictability and performance followed closely at 39% each, underscoring the growing importance of predictable operating expenses as AI deployments scale.

The report also found that private cloud investment plans continue to outpace public cloud spending. Over a three-year outlook, private cloud spending intent increased by 21 percentage points, compared with a 10-point increase for public cloud spending intent. Additionally, 58% of respondents identified building new workloads on private cloud as a strategic priority, up from 53% a year ago.

Data Sovereignty Becomes a Strategic Priority

Beyond economics, the survey found that geopolitical considerations are increasingly shaping enterprise infrastructure decisions.

Four out of five IT leaders reported that geopolitical developments are shaping IT strategy and operations. For the first time, data sovereignty and residency requirements emerged as the top geopolitical concern, cited by 54% of respondents, surpassing jurisdiction-specific compliance requirements, cited by 51%.

The trend is especially pronounced in highly regulated industries, including financial services, healthcare, life sciences, and the public sector. Organizations in these sectors face mounting pressure to maintain control over sensitive data while complying with increasingly complex cross-border governance requirements.

Broadcom argues that the convergence of AI-driven data growth, regulatory pressures, and cloud cost concerns is strengthening the business case for private cloud infrastructure, enabling organizations to maintain greater control over data location and governance.

Prashanth Shenoy, vice president of marketing for Broadcom’s VMware Cloud Foundation Division, tied the shift directly to the move from pilots to production. “As enterprises move from pilots to running AI at production scale, infrastructure and operational costs spike, security gaps surface, and complexity compounds,” he said. “The research is clear: enterprises increasingly prefer private cloud for production AI.”

Survey Details

The Private Cloud Outlook 2026 report is based on research conducted by Radius Tech in partnership with Broadcom. The survey was fielded between February and March 2026 and included 1,800 senior IT decision-makers from enterprise organizations with at least 1,000 employees across eight countries in North America, Europe, and Asia-Pacific. The report was published in June 2026.