Neoclouds Not Ready for AI Networking – Omdia – May 04, 2026.

Many neoclouds are not prepared for the networking demands of artificial intelligence, according to a new audit by Omdia, which warns enterprises to scrutinize suppliers beyond raw compute capacity.

Omdia’s study, covering 50 neoclouds, finds that providers have scaled compute for AI workloads, but networking infrastructure is becoming a critical constraint. AI performance increasingly depends on the ability to process and move data securely across distributed environments and geographies.

Camille Mendler, Omdia

“Network infrastructure will make or break neoclouds,” said Camille Mendler, Omdia Research Director, Telco B2B. “Low-latency, resilient and secure connectivity- from backbone to edge - is table stakes for success, not least because sovereignty spans where AI workloads move.”

Omdia identifies five key risk areas that enterprises adopting AI should investigate:

In-house skills: 43% of neoclouds are seeking network engineers and security specialists to fill urgent competency gaps.

Accountability: Certifications and service commitments for network uptime, security and data sovereignty need scrutiny; over a third of neoclouds minimize contractual liability.

Cloud on-ramps: High-speed interconnection to clouds via public and private peering helps secure consistent performance; more than half of neoclouds do not use Internet peering exchanges.

IP assets: IP address ownership supports rapid growth, traffic localization and routing control; 46% of neoclouds only control small IPv4 address blocks.

IP transit resilience: One in five neoclouds relies on one IP transit provider, potentially creating a single point of failure.

Neocloud networking capabilities vary from rudimentary to advanced, depending in part on their origins, which include bitcoin mining, content distribution, and web hosting.

To learn more, visit: www.omdia.com