Earlier quoted context omitted.
Yup! I worked at a few companies that would co-mingle Internet facing/DMZ VMs with internal VMs. When pointing this out and recommending we should airgap these VMs to it's own dedicated hypervisor it always fell on deaf ears. Jokes on them I guess.
I'm pretty sure AWS/Azure/GCP don’t assign separate boxes to every customer, and somehow they’re fine.
Still, I think that if your company is handling user data it's worth seriously considering dedicated instances for any service that encounters plaintext user information.