Organizations are adopting strategic cloud architectures to drive innovation, strengthen governance, and secure the value of AI.
Kyndryl, a global leader in mission-critical technology services, today released its Cloud Readiness Report 2025, revealing how companies are navigating a crucial shift in cloud strategy that could drive AI adoption and business agility.
The report reveals that while cloud computing has become the backbone of business operations—growing into a $700 billion industry—701,300 CEOs say they arrived at their current cloud environment “by accident, not by design.” However, the lack of a deliberate strategy hasn't slowed investment—organizations have increased cloud spending by more than 30% on average over the past year, at a time when leaders are facing challenges in AI adoption, increasing security demands, and new regulatory and governance requirements.
“The difference between a reactive strategy and a deliberate cloud strategy has never been more significant,” said Nicolas Sekkaki, Global Cloud Practice Leader at Kyndryl. “With AI demanding continuous access to data and governance requirements rapidly evolving, a hybrid cloud model is the differentiator that enables successful AI adoption. Organizations that design for interoperability, trust, and agility will unlock continuous innovation and integrate AI securely and at scale.”
Key findings of the report:
- Sovereignty and security are reshaping cloud strategy – 75% Leaders express concern about the geopolitical risks of storing and managing data in global cloud environments, while 65% They have already modified their strategies in response to new data sovereignty regulations.
- Hybrid and multi-cloud are now the norm – 84% The leaders intentionally use multiple clouds, and 41% They repatriate at least some data to local environments — balancing control, performance, and compliance.
- AI depends on the deliberate design of the cloud. - 89% Leaders say that investments in cloud computing have made the use of AI easier, but 35% They cite integration challenges as one of the main barriers to achieving return on investment. Organizations are increasingly turning to specialized infrastructure, including private AI or neoclouds, both optimized for GPU-driven AI workloads, to balance computing power with cost control.
- Cloud security is evolving into an AI era. As threats increase — with 82% As organizations face a cybersecurity-related downturn this year, companies are responding with more adaptable architectures and enhanced security capabilities. 91% They say their cloud infrastructure offers the flexibility to adapt to new regulations, and 75% They are investing in AI for cybersecurity — more than in any other AI capability.
From reactive to strategic: designing the cloud of the future.
The report highlights that architecture now defines corporate control. Companies that view the cloud as a strategic and intentional capability—aligning infrastructure, governance, and data—are better positioned to securely integrate AI, meet regulatory demands, manage costs, and accelerate innovation.
The rise of agent AI is driving this shift. Organizations are increasingly training models in public clouds for scalability and running them in private environments for governance—combining performance with trust. Hybrid architectures are emerging as the intelligent foundation that seamlessly connects public and private environments, allowing enterprises to balance performance, security, and cost while operationalizing AI.
Safety and Sovereignty is no longer about restrictions, but about design principles for trust and interoperability – essential for the AI-ready enterprise. Global hyperscaler providers are localizing infrastructure to meet new regulatory standards, while enterprises are building architectures that allow data to flow securely across borders and vendors.
Based on insights from the Kyndryl Readiness Report, with 3,700 senior leaders in 21 countries, and from Kyndryl Cloud Innovation Research, Data from the Cloud Readiness Report shows that organizations are reassessing their cloud infrastructure in the face of challenges from AI adoption, increasing security demands, and new governance expectations.
To read the report, visit Kyndryl's Cloud Readiness Report
About Kyndryl
Kyndryl (NYSE: KD) is a leading mission-critical technology services company, offering consulting, implementation, and managed services to thousands of clients in more than 60 countries. As the world's largest IT infrastructure services provider, the company designs, builds, manages, and modernizes the complex information systems the world depends on every day. For more information, visit www.kyndryl.com.
