New report reveals how observability restores financial predictability as enterprises navigate rising AI costs.
Cisco has released its Splunk State of Observability 2026 report, based on a survey of 2,050 IT operations and engineering professionals across 10 countries. The report examines the challenges of monitoring AI agents as organizations expand their use.
According to Cisco, organizations are facing growing uncertainty around AI costs and agent performance. The report highlights the role of observability in monitoring AI agents, controlling spending and aligning AI usage with business value.
The report also found that 83% of respondents are concerned about the unintended consequences of AI agents. This is increasing the need for tools to monitor agent activity and enforce safeguards, while encouraging closer collaboration between IT operations, engineering and security teams.
“As organizations increasingly integrate AI agents into their operations, managing performance, costs and potential risks is becoming more complex,” said Ahmed el Saadi, Group Vice President, MEA & TRC, Splunk. “Observability plays a critical role in restoring predictability and building confidence in the agentic AI era. By providing greater visibility into AI performance and spending, organizations can better manage costs, strengthen oversight and ensure their AI investments deliver measurable business value.”
Splunk State of Observability 2026: Key Findings
AI monitoring and observability gaps
- 87% say monitoring AI is a priority, but 54% lack clear business outcomes tied to it.
- 56% cannot measure AI workload metrics such as large language model (LLM) response quality.
- 85% consider visibility into AI hallucinations important, but only 58% say they are effective at detecting them.
Unpredictable AI costs
- 55% say they cannot control AI costs.
- 60% say unexpected billing spikes cause more operational strain than high baseline costs.
Closer collaboration between observability and security teams
- 81% say monitoring AI workloads has increased collaboration between observability and security teams.
- 73% can accurately trace performance issues to security root causes, up from 65% in 2025.
- 77% of observability teams troubleshoot issues with security teams, up from 62% in 2025.
- Data sharing between observability and security teams has increased from 74% to 84%.
Differences between advanced and other organizations
- 91% of advanced organizations, compared with 69% of other organizations, can accurately attribute AI costs to specific agents, models and workloads.
- Advanced organizations are 2.4 times more likely to say their observability platforms deliver ROI that significantly exceeds expectations.
Source: 2026 Splunk State of Observability Report.
Disclaimer: This article is based on Cisco’s 2026 Splunk State of Observability Report and has been edited for length and readability. Refer to the full report for detailed findings and research methodology.
