UII BRIEFING REPORT 202 | MAY 2026
Briefing Report
Where to deploy AI training: a guide to the economics
14 min read
Generative AI model training does not need to happen in proximity to end users. While this gives a wider range of infrastructure choices for enterprises, it also makes the underlying economics harder to judge. Ultimately, utilization is what determines whether cloud, colocation or owned infrastructure is the cheapest option. Cost alone rarely decides final placement.
KEY POINTS
- Which venue is the cheapest for AI training depends heavily on how effectively capacity is used over time.
- Public cloud remains the lowest-risk starting point for many enterprises because its as-a-service model aligns with experimentation and uncertain demand. Dedicated infrastructure only becomes attractive when training activity is regular enough to justify a fixed investment.
- As AI capability matures, venue decisions increasingly reflect strategic control as much as economics. Organizations with predictable demand, strict data sovereignty requirements or long-term AI ambitions are more likely to shift toward colocation or owned infrastructure.
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