LLM.co today announced the release of a new industry report, Why Most Companies Will Regret Public LLM Adoption, offering a counter-consensus view on the rapid enterprise adoption of public large language models (LLMs). The report argues that while public AI tools have accelerated experimentation and short-term productivity, many organizations are unknowingly accumulating what LLM.co describes as “AI infrastructure debt”—a compounding set of risks that will be difficult and expensive to unwind.
Over the past two years, public LLMs have become embedded across corporate workflows, from legal research and financial analysis to marketing and customer support. According to the report, most of these deployments occurred without the governance, auditability, or architectural rigor traditionally applied to enterprise systems.
“Public LLMs lowered the barrier to entry, but they also lowered the bar for discipline,” said Timothy Carter, Chief Revenue Officer at LLM.co. “What we’re seeing now is a growing gap between how AI is being used and how enterprises are actually required to operate—especially in regulated or client-confidential environments.”
A Convenience Tradeoff With Long-Term Consequences
The report draws parallels between today’s AI adoption curve and early cloud computing mistakes, when speed and cost savings often came at the expense of security, data governance, and vendor independence. In the case of public LLMs, LLM.co’s research suggests the risks are more subtle—but potentially more severe.
Among the report’s key findings:
- Persistent data exposure risk: Even when organizations attempt to limit data sharing, public LLM usage can create uncontrolled data propagation across prompts, logs, and downstream systems.
- Non-deterministic system behavior: Model updates outside the organization’s control can silently alter outputs, breaking workflows and introducing compliance risk.
- Audit and explainability gaps: Prompt-driven processes are difficult to version, audit, or defend in regulated environments.
- Vendor dependency: Public LLMs create strategic lock-in, limiting an organization’s ability to control cost, performance, or long-term AI direction.
- Fragile operational workflows: AI systems built around prompts rather than architecture are prone to failure as scale and complexity increase.
LLM.co introduces the term “AI infrastructure debt” to describe how these issues accumulate over time. Unlike traditional technical debt, AI infrastructure debt can carry legal, regulatory, and reputational consequences that extend beyond engineering teams.
“Most companies don’t realize they’re making architectural decisions when they copy and paste into a public LLM,” said Samuel Edwards, Chief Marketing Officer at LLM.co. “But those decisions compound. At scale, they affect brand trust, client confidentiality, and even a company’s ability to explain or defend how decisions are made.”
Why Regulated Industries Are at Higher Risk
The report highlights that law firms, financial services companies, healthcare organizations, and advisory firms face disproportionate exposure due to strict confidentiality and compliance obligations. In these environments, the use of public LLMs can conflict with requirements around data residency, retention, and auditability—even when usage is informal or unsanctioned.
“Many firms assume AI policy will catch up later,” Carter added. “The reality is that by the time policy catches up, AI is already embedded in day-to-day operations. Undoing that is far harder than doing it right from the start.”
The Inevitable Shift Toward Private AI Infrastructure
Rather than arguing against AI adoption, the report makes the case that enterprises are moving toward a second phase of AI maturity—one focused on private, controlled, and domain-specific deployments. According to LLM.co, this shift mirrors the evolution of cloud computing, where early public usage eventually gave way to private, hybrid, and compliance-driven architectures.
The report outlines characteristics of what it calls “private-by-design” LLM systems, including controlled training data, predictable update cycles, auditable workflows, and the ability to deploy models within private cloud or on-premise environments. These approaches, the report argues, allow organizations to capture the benefits of AI without surrendering control over their data or decision-making processes.
“AI isn’t going away, and neither is public experimentation,” Edwards said. “But serious organizations will separate experimentation from infrastructure. The winners will be the ones who treat AI like a core system—not a browser tab.”
About LLM.co
LLM.co helps organizations design, deploy, and govern private and hybrid large language model infrastructure. Built by software development company DEV.co, The company specializes in secure, domain-trained AI systems for enterprises and regulated industries seeking long-term control, compliance, and operational resilience in their AI strategy.