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Broadcom Research Says Enterprise AI Is Tipping Toward Private Cloud

• By David Ramel
• 06/22/2026

Broadcom Inc. is framing its latest private cloud research around what it calls an enterprise AI "tipping point," saying production AI workloads are changing how organizations evaluate cloud architecture, cost, security and governance.

The company's Private Cloud Outlook 2026 report, titled "The AI Tipping Point," is based on a global survey of 1,800 senior IT decision-makers across the Americas, Europe and Asia-Pacific. The report follows Broadcom's earlier private AI messaging around VMware Cloud Foundation 9.1, which we covered in "Private AI, Not Public Cloud: Broadcom's Message With VMware Cloud Foundation 9.1".

In a June 9 announcement, Broadcom said the AI experimentation phase is over and that private cloud is where enterprise AI workloads are being deployed for security and scale. The company said the shift is being shaped by "costs, complexity, and control" as enterprises move AI workloads into production.

Production AI Shifts Toward Private Cloud
Broadcom said 56 percent of enterprises surveyed are running or planning to run production AI inferencing on private cloud. The company also said public cloud use for the same workloads fell 15 percentage points year over year, from 56 percent to 41 percent.

The report says public cloud remains part of enterprise IT strategy for experimentation, elastic capacity and specialized services. But Broadcom said AI production workloads introduce sustained compute demand, sensitive data flows, governance requirements and performance expectations that can expose limits in a purely public cloud approach.

The shift is also reflected in repatriation data. Broadcom said 83 percent of enterprises are considering or have already repatriated workloads from public cloud to private cloud, and 50 percent have already repatriated some workloads. In 2025, the corresponding figures were 69 percent considering or already repatriating and 35 percent already having done so.

AI appeared as a repatriation category for the first time in the 2026 study. Broadcom said 43 percent of organizations repatriating workloads are moving AI training, large language models and inference from public cloud to private cloud.

In a Broadcom blog post on the report, Prashanth Shenoy, vice president of marketing for the VMware Cloud Foundation Division at Broadcom, wrote that "as enterprises look to scale, the direction has changed." The same post said enterprise AI "has found its infrastructure home. And it is private cloud."

Cost Replaces Security as Top Public Cloud Concern
Broadcom said cost has overtaken security as the top public cloud concern in the 2026 study. According to the report, 31 percent of respondents cited cost management as a leading public cloud challenge, up from 26 percent in 2025.

The report also said 97 percent of surveyed IT leaders believe some portion of their public cloud spend is wasted, while 52 percent said that waste exceeds 25 percent. Broadcom linked those findings to AI infrastructure pressures, including compute, storage, bandwidth, GPU pricing, data movement fees and unpredictable usage patterns.

Broadcom said 62 percent of IT leaders are very or extremely concerned about generative and agentic AI infrastructure costs. The report said cost predictability is now the second-biggest driver for repatriation, cited by 39 percent of organizations. Security and compliance remained the top driver at 51 percent, and performance was also cited by 39 percent.

Shenoy said in the Broadcom announcement, "As enterprises move from pilots to running AI at production scale, infrastructure and operational costs spike, security gaps surface, and complexity compounds. The research is clear: enterprises increasingly prefer private cloud for production AI."

Security, Sovereignty and Governance Shape Placement
Security and compliance still play a central role in workload placement decisions. Broadcom said 32 percent of respondents chose security and compliance as the single most important factor in workload placement, ahead of cost, performance and scalability.

The report said AI is adding new requirements to enterprise infrastructure. Data protection and privacy were cited by 37 percent of respondents as the biggest new requirements introduced by AI, followed by security and control at 36 percent.

Broadcom also said geopolitical and regulatory factors are affecting enterprise IT strategy and operations. According to the report, 86 percent of IT leaders said those factors are affecting their strategy and operations. Data sovereignty and residency requirements were the top geopolitical concern, cited by 54 percent of respondents.

The report defines private cloud as dedicated infrastructure for a single organization, potentially owned or managed by the organization, a third party or both. Examples listed in the report include VMware Cloud Foundation and Red Hat OpenShift. The report defines public cloud as shared infrastructure run by a third-party provider, with examples including AWS, Azure and Google Cloud, and says SaaS is excluded.

AI Readiness Extends to Modernization
In a separate Broadcom post on AI readiness, the company connected the private cloud findings to application modernization and platform engineering. That post said 57 percent of enterprise IT teams surveyed reported that their top modernization approach is adding AI capabilities to existing applications.

The same post said 72 percent of enterprises have modernized less than half of their application portfolio. Broadcom said the old model of sequential transformation, in which modernization comes first and AI comes second, does not fit the operating reality most IT teams are navigating.

Broadcom also said surveyed organizations expressed confidence in private cloud capabilities. The company said 93 percent agree that private cloud delivers the reliability business-critical applications demand, and 92 percent said it provides the financial transparency and predictable costs needed to govern AI infrastructure spending.

The Private Cloud Outlook report says private cloud spending plans are increasing. Broadcom said intent to increase private cloud spend over three years rose from 51 percent to 72 percent, while the priority to build new private cloud workloads climbed from 53 percent to 58 percent.

Survey Scope and Methodology
The report said Broadcom partnered with Radius Tech for the research. The sample included 1,800 senior IT decision-makers worldwide, with 600 participants each from North America, Europe and Asia-Pacific. Countries listed in the methodology include the United States, Brazil, the United Kingdom, France, Germany, India, Japan and Australia.

The survey was web-based and conducted from Feb. 11 through March 13, 2026. Respondents were director level or above with direct responsibility for or influence over IT infrastructure and cloud strategy. The report said responsibilities covered cloud infrastructure, security, networking, platform engineering or related disciplines.

Broadcom said 69 percent of participants came from large enterprises with 5,000 or more employees. Industries represented included healthcare, public sector, financial services, life sciences/pharmaceutical and other categories.