With cloud spending expected to increase by 28 percent in the coming year, a new poll of over 750 technical professionals and executive leaders worldwide finds that 84 percent see managing cloud spend as their top challenge.

The study from Flexera shows 33 percent of organisations are spending more than $12 million annually on the public cloud alone partly driven by AI adoption. With cloud budgets already exceeding limits by 17 percent, organisations are increasingly turning to managed service providers (60 percent) and expanding use of their FinOps teams to regain control over spending (59 percent).

While estimated wasted cloud spend is falling, the adoption of AI-related public cloud services is rising. In addition to a surge in the use of data warehouse services (76 percent) — often leveraged to feed AI models — generative AI public cloud service use is booming with 72 percent of organisations reportedly using the technology either extensively or sparingly, as compared to 47 percent in 2024.

“AI is in its prime with no indication of losing momentum,” says Jay Litkey, senior vice president of cloud and FinOps at Flexera and governing board member at the FinOps Foundation. “I suspect we’ll see further acceleration of AI use as more organisations embrace their own AI investments and technology vendors introduce agentic AI into their existing toolsets. To stay on budget and accurately forecast for future needs, organisations need to fine-tune how to track and manage their cloud spend and use with FinOps now — or risk a significantly wasted investment.”

Some organisations are moving their workloads back to non-cloud environments (their own datacenters and/or co-located/hosted environments). While this is beginning to happen, only a minority (21 percent) of cloud workloads have currently been repatriated.

Sustainability is a factor too, 57 percent of respondents report they have, or plan to have, a defined sustainability initiative in place within a year, including carbon footprint tracking of cloud use. However, ​saving money is still top of mind given 57 percent saying cost optimisation takes priority over sustainability.

The 2025 State of the Cloud report is available from the Flexera site.