AI Adoption Hits a Snag: Rising Inferencing Costs Challenge Cloud Users • The Register

Broader AI adoption in enterprises faces challenges due to concerns over forecasting inferencing costs, leading to fears of excessive cloud bills, according to Canalys. Global spending on infrastructure and platform-as-a-service reached $90.9 billion in Q1, marking a 21% year-on-year increase as businesses migrate workloads to the cloud and explore generative AI. However, uncertainty about recurring inferencing costs complicates AI commercialization. Unlike one-time training expenses, inferencing creates ongoing operational costs that businesses must manage. Many AI services follow volatile usage-based pricing, prompting enterprises to limit usage or deployment strategies. Recent cases, such as 37signals incurring over $3 million in annual cloud costs, underscore budgetary concerns. As alternatives to public cloud models gain traction, Canalys notes that AWS, Azure, and Google Cloud still dominate the market, though Microsoft and Google are growing faster due to AWS’s slowing growth rate.

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