The rapid adoption of GenAI is reshaping cloud computing, offering transformative solutions while accelerating the achievement of sustainability goals. As cloud providers navigate regulatory complexity, escalating costs, and environmental pressures, GenAI is emerging as a critical enabler of innovation and efficiency.
This post explores how GenAI empowers cloud ecosystems to thrive in 2025 and beyond.
Navigating Regulatory Challenges in Cloud Sustainability
Navigating complex and ever-evolving regulatory landscapes remains a challenge for cloud technology vendors. Governments worldwide are implementing stringent regulations to curb carbon emissions and promote sustainable practices.
The EU’s Corporate Sustainability Reporting Directive (CSRD), for example, mandates comprehensive sustainability reporting. The European bloc’s Energy Efficiency Directive (EED) has introduced obligations, especially for datacenter operators, in terms of energy saving and energy efficiency. Noncompliance can lead to hefty fines and damage to a company’s reputation.
GenAI can potentially assist cloud vendors in ensuring compliance with regulations by automating the collection, analysis, and reporting of ESG data. AI can process vast amounts of data from various sources, identify relevant regulatory requirements, and generate accurate and comprehensive sustainability reports.
This not only reduces the administrative burden on cloud vendors but also ensures timely and accurate compliance with regulatory requirements.
Managing Cloud Energy Consumption and Carbon Footprint
According to IDC, global IT datacenter capacity will grow from 180GW in 2024 to 296GW in 2028, and electricity consumption will rise from 397TWh to 915TWh in 2028. Electricity is the largest ongoing expense to run a datacenter.
As the demand for cloud services continues to surge, so does the energy required to power datacenters. This presents a significant challenge for cloud vendors striving to reduce their carbon footprint.
To address this, vendors must invest in energy-efficient technologies and collaborate with energy providers to ensure a steady supply of green energy. An IDC survey found that while 31% of organizations are looking to deploy GenAI workloads in locations able to offer renewable or zero-carbon energy supplies, 31% also say that GenAI workloads are helping the company reduce its overall greenhouse emissions through business-level optimization and efficiency improvements.
AI models can optimize cloud datacenter operations by predicting and managing energy consumption more efficiently. AI-driven energy management solutions can analyze patterns in energy usage, predict peak demand periods, and optimize cooling systems to reduce energy consumption.
Cloud Vendors: Balancing Cost and Sustainability
Cloud vendors are increasingly adopting FinOps and GreenOps. These — along with advanced analytics, AI, and machine learning — will provide better data and insights and increase visibility into cloud resources, resulting in better optimization.
GenAI can analyze spending patterns and recommend cost-saving measures. AI-driven financial models can analyze the costs and benefits of various sustainability initiatives, helping cloud vendors make informed decisions that maximize both sustainability and profitability. For instance, AI might suggest moving non-critical workloads to less expensive storage options or shutting down underutilized instances automatically.
We predict that 60% of organizations will leverage GenAI for sustainable transformation by 2026, reflecting a significant shift toward data-driven decision-making in ESG initiatives.
Conclusion
As we move deeper into 2025, cloud technology vendors are facing a multitude of obstacles in their quest for sustainability. Navigating complex regulatory landscapes, managing energy consumption, ensuring supply chain sustainability, balancing costs, meeting customer expectations, and innovating and optimizing for sustainability are all critical challenges that vendors must address.
GenAI offers a powerful tool to help overcome these challenges and propel sustainability in the cloud tech industry. By leveraging AI, the cloud ecosystem can optimize operations, enhance supply chain sustainability, balance cost and sustainability, drive innovation, and contribute to a more sustainable future.
How IDC Can Help
IDC’s Custom Solutions portfolio can assist cloud ecosystem players in addressing sustainability challenges through tailored services and strategic guidance.
1. Research and Advisory Services: IDC provides in-depth research and expert advice on trends, regulations, and best practices specific to the cloud industry.
2. Custom Market Intelligence: Vendors can gain insights into market dynamics, competitive landscapes, and customer expectations.
3. Strategic Consulting: IDC consultants work with vendors to develop and implement comprehensive strategies, including on “where to play” and “how to win” in the marketplace.
4. Content Marketing Services: We can help create compelling content to communicate the value proposition and enhance brand reputation and customer engagement.
5. Sales Enablement: Equipping sales teams with knowledge, tools, and content helps to effectively communicate the value proposition to customers and stakeholders.