The adoption of AI and generative AI (GenAI) is accelerating across industries. 2024 was another year of explosive growth for the technology, and 2025 promises to be more of the same.
However, not everyone is jumping in with both feet. Some companies are more reticent about adopting GenAI and the public cloud risks and exposures that come with it. Leaders in regulated industries like healthcare, financial services, law, and energy are understandably wary of potential privacy breaches or compliance issues. Rapidly increasing cloud costs and model accuracy concerns further complicate the decision of how to adopt GenAI.
But what if you could take advantage of all the benefits of GenAI within your own four walls? No data on public clouds, no surprise cloud cost spikes, no loss of control of your data.
As businesses look to harness the power of AI while mitigating risks, the move to private, on-premise AI is gaining momentum. According to a report from Vespertec, nearly three-quarters (70%) of enterprises plan to move AI models onto their own on-premises hardware in the near future.
Top 5 Drivers of Private AI Adoption
A growing number of companies are shifting away from public cloud-based AI models in favor of on-prem solutions.
1) Privacy and Security
The primary driver for private AI adoption is the need to protect sensitive data, especially for companies in heavily regulated sectors like healthcare and finance.
When running solutions such as ChatGPT and even CoPilot, your prompt, inclusive of any data, code or algorithms that might be included, goes to a public endpoint on the internet to be processed by a Large Language Model (LLM).
Even as hosting companies provide policies that dictate your data isn’t saved or used for training purposes, there’s still a lot of uncertainty and concern for the security of data, and the risk of policies changing. Sensitive corporate data entered into public AI models could inadvertently be stored, reused, or exposed in future responses, exposing valuable intellectual property.
2) Cost Optimization
While initial setup costs might be higher, some companies are moving to on-premise AI to gain better control over costs associated with public cloud usage, especially for large-scale AI applications. Experts predict that in 2025, many companies will shift to on-premises AI to cut cloud costs that can easily reach $1 million a month for large enterprises.
Public AI platforms offer convenience, but since they charge based on usage, costs can escalate quickly as businesses scale their AI applications. Private AI offers lower long-term operational costs, optimized infrastructure investment, and reduced dependency on external providers.
3) Compliance Needs
Public AI platforms process vast amounts of user data, raising concerns about unauthorized access, data leaks, and regulatory non-compliance (e.g., GDPR, HIPAA, CCPA). Some industries, including finance, healthcare, and government sectors, have strict data governance policies that restrict the use of public AI models. They must adhere to strict compliance requirements regarding data usage, storage, and AI decision-making transparency. On-prem AI helps companies ensure AI applications remain compliant with evolving legal frameworks and data residency laws.
In addition, private AI enhances auditability and AI governance, so organizations can track, document, and justify AI model outputs, which is critical for compliance audits.
4) Efficiency, Productivity, Accuracy
Public AI models are trained on massive datasets that may not align with a company’s specific needs. On-prem AI allows businesses to fine-tune models for:
- Higher accuracy: Tailored models trained on proprietary data yield better, more relevant outputs.
- Better data governance: Companies maintain control over data inputs, improving data access, ensuring accuracy and reducing biases. This also leads to higher productivity and better decision-making.
- Seamless integration: Private AI can be customized to fit directly into existing enterprise systems, improving workflows and decision-making.
By leveraging private AI, companies can achieve more reliable, context-aware results that directly enhance business operations.
5) Reliability & Control
Businesses using public AI have limited control over model updates, algorithmic biases, and system downtime, making these tools less predictable for mission-critical applications. With private AI, enterprises gain full autonomy over AI model development, updates, and deployment strategies, ensuring business continuity and long-term adaptability.
The Rise of Secure and Scalable Private AI Solutions
By prioritizing security, cost efficiency, compliance, productivity, and reliability, organizations are future-proofing their AI strategies with private, on-prem AI. As the demand for trustworthy and scalable AI solutions grows, businesses that take control of their AI infrastructure will gain a competitive edge.
Ready to Bring GenAI In-House? Learn more about Private AI Accelerator.
If you’re ready to explore on-prem GenAI solutions, Presidio’s Private AI Accelerator provides a state-of-the-art LLM running on your hardware, with a modern web-based front-end for client access.
Private AI Accelerator is a first-of-its-kind offering that removes all risk from Gen AI. It’s a packaged offering that comes with hardware, software, services, and the freedom to choose: your model, your container platform, your compute.
“Presidio unlocks the transformative power of AI across IT modernization, security, digital transformation and cost optimization for our customers,” said Rob Kim, Chief Technology Officer at Presidio. “Our engineers developed our Private AI Accelerator to provide Gen AI’s many benefits without the risk of exposing business assets and data.”
Our private AI solution is optimized with NVIDIA’s latest GPU’s to be deployed and run within your private datacenter. As an alternative to public cloud providers, this cost-effective option offers a completely private solution with no data leaving your environment. This allows you to control expenses, reduce subscription costs, and maximize AI investment returns, all with the assurance your data remains fully private.
Want to learn more? Contact Presidio today to learn how our Private AI Accelerator can help your business stay ahead.
