Healthcare, Financial Services and Public Sector Face Growing Shadow AI and Data Sovereignty Risks, Nutanix Finds

Nutanix has released new findings from its eighth annual Enterprise Cloud Index (ECI) research, highlighting the growing infrastructure, security and governance challenges facing healthcare, financial services and public sector organizations as they expand their use of artificial intelligence.

The industry-specific ECI reports show that AI adoption is accelerating across these highly regulated sectors, but many organizations say their existing infrastructure is not yet prepared to support AI workloads at scale. The research highlights shadow AI, data sovereignty, compliance and organizational silos as key concerns as organizations modernize hybrid multicloud environments for AI applications.

According to Nutanix, the challenges are particularly significant in regulated industries because strict regulatory requirements increase the risks associated with unauthorized AI usage and data sovereignty. Organizations are therefore balancing the need to accelerate AI innovation with requirements for security, compliance, resilience and governance.

“Organizations across every industry are working to move their AI projects from experimentation to delivering real business value, but the infrastructure requirements vary significantly depending on sector and workload,” said Thomas Cornely, EVP of Product Management at Nutanix. “The one consistent factor is a need for infrastructure and operating models that deliver flexibility, resiliency, and security to run both traditional and AI-powered applications at scale.”

Shadow AI Creates New Governance Challenges

Nutanix defines shadow AI as the use of AI tools by employees or business units without approved IT governance or security oversight. The company said the practice continues to create concerns across highly regulated industries, while organizational separation between business units and IT teams can further complicate AI governance.

“Across the Middle East and Africa, organizations in highly regulated sectors are embracing AI to improve services, accelerate innovation, and strengthen resilience. But as AI moves from experimentation into everyday operations, the conversation is shifting from what AI can do to how it can be deployed responsibly,” said Mohammad Abulhouf, Vice President & GM, Middle East & Africa, Nutanix. “Data sovereignty, security, and governance are becoming essential foundations for AI adoption, particularly in healthcare, financial services, and the public sector. Organizations that modernize their infrastructure with these requirements in mind will be better positioned to capture the benefits of AI while maintaining the trust of customers, citizens, and communities.”

Healthcare Organizations Prioritize AI Security and Data Sovereignty

Healthcare organizations are increasingly adopting AI for clinical and administrative applications. Nutanix said application containerization is becoming an important part of these deployments by providing secure and portable environments while helping organizations address cloud latency and data sovereignty requirements. However, infrastructure readiness remains a major operational challenge.

The Nutanix Healthcare ECI Report found that:

• 72% of healthcare IT leaders identify data sovereignty as a top infrastructure priority.
• 83% of healthcare organizations consider unauthorized “shadow AI” tools a critical business and data risk.
• Healthcare organizations expect generative AI (62%), agentic AI or autonomous agents (57%), and predictive analytics or machine learning models (55%) to be among the leading AI applications and capabilities they use over the next three years.

Nutanix said healthcare AI adoption is being driven by efforts to improve operational efficiency, patient outcomes and innovation, while infrastructure readiness, shadow AI and operational barriers remain challenges.

Financial Services Focus on AI Resilience and Governance

Financial institutions are deploying AI across areas including core systems, customer service, in-branch personalization, anomaly detection and edge operations. At the same time, data sovereignty requirements are encouraging greater focus on secure hybrid cloud architectures.

Key findings from the Nutanix Financial Services ECI Report include:

• 86% of financial sector executives believe unmanaged shadow AI tools create severe business risk.
• 62% of financial services IT leaders expect conversational and agentic AI to materially improve customer or employee experiences.
• 90% of financial services IT leaders report that AI is meaningfully accelerating container adoption.

The research also found that public cloud accounts for 62% of financial services infrastructure use, while 79% of financial services IT leaders identify data sovereignty as a high-priority or must-have requirement. Containers and hybrid infrastructure are emerging as important components for supporting AI workloads across core systems and edge environments.

Public Sector Faces AI Infrastructure Readiness Gap

Government and education organizations are working to expand AI capabilities while protecting public data and meeting mission requirements. Nutanix said application containerization is helping organizations improve the speed, scalability and security of AI workloads, although unmanaged shadow AI remains a concern.

The Nutanix Public Sector Report found:

• 91% of government and education IT leaders believe unvetted AI usage creates severe mission and security risks.
• 73% of public sector infrastructure is currently not ready to run complex AI workloads on-premises.
• 87% of public sector technology leaders expect their reliance on application containerization to increase over the next three years.

The research covers federal, state and local governments, K-12 organizations and higher education institutions. These organizations are using AI for applications ranging from benefits eligibility to fraud detection, while continuing to address infrastructure readiness, workforce capabilities and governance challenges.

Nutanix Enterprise Cloud Index Research

The latest findings come from the eighth consecutive annual Enterprise Cloud Index research study commissioned by Nutanix. Wakefield Research conducted the survey in November 2025, gathering responses from 1,600 cloud, IT and engineering executives with at least manager-level positions.

The respondents represented organizations with 500 or more employees across Australia, Brazil, France, Germany, India, Italy, Japan, Mexico, the Netherlands, the Kingdom of Saudi Arabia, Singapore, Spain, the United Kingdom and the United States.

The industry-specific reports provide a deeper look at how healthcare, financial services and public sector organizations are adapting their infrastructure strategies as AI adoption grows, with security, compliance, governance and data sovereignty emerging as critical considerations.