A new report by Wipro reveals that cloud computing is the driving force behind the rapid adoption of AI across industries, enabling enterprises to unlock new capabilities, scale operations, and navigate the challenges of a digital-first economy.

Based on insights from 500 business leaders in the US and Europe, the study, Pulse of Cloud: Building an Enterprise for the AI Era highlights how cloud infrastructure is empowering organisations to become AI-ready, while underscoring the strategic decisions and obstacles that accompany this transformation.

Cloud as the Catalyst for AI Growth

For enterprises embracing AI, cloud computing has emerged as a necessity rather than an option.

The report finds that 90% of enterprises now use cloud infrastructure to power their AI initiatives, a dramatic shift driven by the growing demands of generative AI and other advanced applications.

Initially, many organisations experimented with AI using their existing on-premises infrastructure, which was sufficient for small-scale proof-of-concept (POC) projects.

However, as AI models have grown in size and complexity, the limitations of on-premises systems have become apparent. Cloud services, with their unparalleled scalability and processing power, have become indispensable for enterprises looking to expand their AI capabilities.

The Rising Demand for Public Cloud

Cloud spending has doubled between 2019 and 2023, with generative AI emerging as the most significant driver of this growth.

Public cloud, in particular, is gaining momentum as the preferred platform for AI workloads. Currently, 25% of enterprises rely on public cloud for AI implementations, a figure expected to rise to 37% within six months and 43% within a year.

However, the report also notes that not all AI workloads are suited to the public cloud. Certain use cases, such as autonomous driving, require the near-zero latency provided by edge computing, while regulatory constraints may tether other applications to on-premises systems.

As a result, 65% of surveyed enterprises are adopting hybrid models that combine public cloud, private cloud, and on-premises solutions to meet diverse operational needs.

Scalability and Security: Key Drivers of Cloud Adoption

Among the business leaders surveyed, scalability emerged as the most significant benefit of cloud infrastructure for AI, cited by 29% of respondents. The ability to scale up and down as needed not only reduces costs but also enables companies to craft more dynamic strategies and explore new business models powered by AI, including generative AI.

Cloud infrastructure also provides enhanced security capabilities that often surpass those of on-premises systems. Public cloud platforms offer robust, auditable tools for securely configuring environments, ensuring that enterprises can meet stringent compliance and data protection requirements while maintaining operational reliability.

Despite the clear advantages of cloud computing, the journey to becoming AI-ready is not without challenges.

The report found that 70% of business leaders are experiencing difficulties in orchestrating AI technologies across hybrid environments, where public cloud, private cloud, and on-premises systems must work seamlessly together.

Another pressing concern is the ability to measure the return on investment (ROI) of AI initiatives.

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Globally, 28% of leaders admit they lack confidence in assessing the ROI of their AI programs. The report advises enterprises to define clear goals and align AI initiatives with measurable key performance indicators (KPIs), such as cost reduction, productivity improvements, or increased customer engagement.

Moreover, building and managing AI infrastructure requires substantial resources and expertise. The complexity of setting up and scaling on-premises hardware often drives organisations toward cloud solutions.

As AI continues to evolve, it is becoming a top priority for enterprise budgets. According to the report, 93% of business leaders rank AI infrastructure design and implementation as their highest investment priority.

Jo Debecker, managing partner and global head of Wipro FullStride Cloud, said: “At Wipro, we are seeing first-hand how the cloud is helping businesses to scale their AI implementation and deliver real business value, whether through rapidly accelerating back-end processing or scaling client-facing capabilities up and down based on fluctuating demand.”