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The emergence of artificial intelligence (AI) presents challenges for IT managers in Windows Server environments, requiring evaluation of operational and business factors to determine the best deployment strategy—on-premises or cloud. Windows Server 2025 is set to enhance AI features, encouraging organizations to utilize existing infrastructure for AI initiatives. AI can improve analytics and IT operations by processing large datasets and automating tasks, but it has limitations in areas requiring creativity and nuanced decision-making. A cost-benefit analysis is essential for AI projects, focusing on ROI through time savings and efficiency improvements. Microsoft provides resources to help calculate ROI, including Total Economic Impact studies and AI Business School frameworks. Key factors influencing AI deployment costs include the choice between cloud and on-premises models, custom versus prebuilt AI models, and the complexity of the business case. Operational considerations for successful AI deployment include skill development, security protocols, environmental impact, and supply chain dependencies. Windows Server 2025 will introduce features like GPU partitioning and live migration for optimizing AI workloads. The decision between on-premises and cloud deployment involves assessing control, costs, scalability, and risk management strategies.