As enterprise AI budgets hit their limits earlier each year, the pressure to fund new agentic and inference workloads without expanding total spend is forcing a fundamental rethink of infrastructure and data center modernization.<\/p>\n
The State of FinOps 2026 Report<\/a> found that 98% of practitioners now manage AI spend, even as most organizations still overspend on AI workloads by four to five times their original budget. The core tension \u2014 more AI demand, constrained budgets, aging hardware \u2014 is exactly the problem Advanced Micro Devices Inc. says it is built to solve, according to Mike Thompson<\/a> (pictured, right), director of cloud product at AMD and FinOps Foundation Project, a Series of LF Projects LLC,\u00a0governing board member.<\/p>\n \u201cThe era of token maxing is kind of over because the spends are going through the roof,\u201d Thompson said. \u201cThere\u2019s a period of rationalization that I think the industry is going through now, particularly on AI applications and agentic [workloads], because those ones are really practical. \u2026 Budgets tend to get spent one to two quarters into the year. There\u2019s so much dynamic development in the AI space that two to three quarters in, budgets are already tapped out.\u201d<\/p>\n Thompson and Jim Greene<\/a> (left), director of server product marketing at AMD, spoke with theCUBE\u2019s John Furrier<\/a> and Paul Nashawaty<\/a> at FinOps X 2026<\/a>, during an exclusive broadcast on theCUBE, SiliconANGLE Media\u2019s livestreaming studio. They discussed how data center modernization, EPYC processor consolidation and x86 hybrid cloud architecture can unlock the budget headroom enterprises need to fund next-generation AI. (* Disclosure below.)<\/p>\n Data center modernization frees capacity for AI investment<\/p>\n Enterprise infrastructure waste is the hidden lever in the AI budget equation. Much of the enterprise server base runs six or seven years old \u2014 hardware extended well past its useful life that simply cannot support modern AI workloads, Greene noted, making data center modernization essential. Replacing eight legacy servers with a single AMD EPYC-based system, can dramatically reduce power draw, rack footprint and software licensing costs, creating room for new AI investment, he explained.<\/p>\n \u201cWe can have customers coming in saying: \u2018I can replace eight of those old Ice Lake servers or some old prior generation Intel, and I can replace it with one EPYC server \u2014 that\u2019s gonna save the power, that\u2019s gonna save the space,’\u201d Greene said. \u201cOver time, because it\u2019s so much more energy efficient and so much more license efficient, you save the money as well.\u201d<\/p>\n Low server utilization compounds the problem. A large share of the market runs central processing units at roughly 10% utilization \u2014 leaving 90% of compute power idle and burning power while doing nothing, Thompson noted. As part of its contribution to the FinOps Foundation, AMD is promoting a \u201cshift-left\u201d philosophy<\/a> in which architecture choices \u2014 including processor selection \u2014 are treated as financial decisions. The gap between a well-chosen x86 instance and a poorly matched alternative can significantly impact annual operating expenses, Thompson said.<\/p>\n \u201cThere\u2019s a 30 to 40% OPEX difference, annual OPEX difference between a couple of compute platforms that look the same,\u201d he said. \u201cA lot of folks don\u2019t consider that nowadays, and particularly when you\u2019re landing the applications, making those wise choices upfront is better. Otherwise, a year or two years later, the FinOps team is gonna find this egregious waste and then force you through a more painful change rather than making a smart choice upfront.\u201d<\/p>\n The x86 architecture also shapes the hybrid cloud equation. Arm-based cloud instances can look competitive on paper, but the hidden costs of porting applications, maintaining dual code bases and managing two to three environments in parallel offset any apparent savings, according to Greene. AMD EPYC\u2019s x86 compatibility means workloads can move between on-premises servers and cloud instances \u2014 including bursting at peak demand \u2014 with no recompilation and minimal operational overhead.<\/p>\n \u201cIf you\u2019re on x86 on-prem, you have a single pane of glass to manage it all,\u201d Greene said. \u201cSpilling over into cloud or bursting into cloud is the push of a button. If you try to do that between Arm and x86, you gotta recompile everything, have a whole different environment. Hybrid environments beg for a single architecture.\u201d<\/p>\n Stay tuned for the complete video interview, part of SiliconANGLE\u2019s and theCUBE\u2019s coverage of\u00a0FinOps X 2026<\/a>:<\/p>\n (* Disclosure: TheCUBE is a paid media partner for the FinOps X event. Neither the FinOps Foundation, the sponsor of theCUBE\u2019s event coverage, nor other sponsors have editorial control over content on theCUBE or SiliconANGLE.)<\/p>\n Photo: SiliconANGLE<\/p>\n Support our mission to keep content open and free by engaging with theCUBE community. Join theCUBE\u2019s Alumni Trust Network, where technology leaders connect, share intelligence and create opportunities.<\/p>\n 15M+ viewers of theCUBE videos, powering conversations across AI, cloud, cybersecurity and more About SiliconANGLE Media<\/p>\n SiliconANGLE Media is a recognized leader in digital media innovation, uniting breakthrough technology, strategic insights and real-time audience engagement. As the parent company of SiliconANGLE<\/a>, theCUBE Network<\/a>, theCUBE Research<\/a>, CUBE365<\/a>, theCUBE AI<\/a> and theCUBE SuperStudios \u2014 with flagship locations in Silicon Valley and the New York Stock Exchange \u2014 SiliconANGLE Media operates at the intersection of media, technology and AI.<\/p>\n Founded by tech visionaries John Furrier and Dave Vellante, SiliconANGLE Media has built a dynamic ecosystem of industry-leading digital media brands that reach 15+ million elite tech professionals. Our new proprietary theCUBE AI Video Cloud is breaking ground in audience interaction, leveraging theCUBEai.com neural network to help technology companies make data-driven decisions and stay at the forefront of industry conversations.<\/p>\n","protected":false},"excerpt":{"rendered":"As enterprise AI budgets hit their limits earlier each year, the pressure to fund new agentic and inference…\n","protected":false},"author":2,"featured_media":68171,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[24,25,38125,11153,396],"class_list":["post-68170","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ai","tag-ai","tag-artificial-intelligence","tag-data-center-modernization-unlocks-ai-budget-headroom-as-enterprises-fund-new-ai-workloads","tag-jonathan-anthony","tag-siliconangle"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/68170","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=68170"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/68170\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/68171"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=68170"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=68170"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=68170"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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