The bare metal cloud providers will be rubbing their hands together
Though isn’t it only a problem when two VM share the same physical machine? If yes then all you need to do as a client is to never rent a fraction of a physical machines but specs that correspond to a full machine.
Cloud vendors don't guarantee colocation of your resources unless you specifically arrange that. And for that matter, often you specifically don't want co-location, because you want redundancy and migration.