The global cloud infrastructure services market reached a record $82 billion in Q3 2024, marking a 21 percent year-on-year growth, according to Canalys.
The surge in spending was driven by rapid advancements in artificial intelligence (AI), with hyperscalers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud leveraging AI to expand their offerings and boost revenue. These three leading providers captured 64 percent of total market share, collectively growing by 26 percent year on year.
Amazon Web Services (AWS) has retained its 33 percent market share and recorded a 19 percent annual growth rate.
AI-related revenue soared, growing over three times faster than its overall business.
AWS introduced new generative AI models like Claude 3.5 Sonnet and Llama 3.2 via platforms such as Amazon Bedrock and SageMaker.
AWS announced US$75 billion in 2024 capital expenditure, primarily to expand AI infrastructure.
Microsoft Azure held a 20 percent market share, with a 33 percent year-on-year growth.
AI services accounted for approximately 12 percent of total revenue growth, driven by a doubling in Azure OpenAI adoption over the past six months.
Microsoft Azure expanded AI capabilities with industry-specific models, including medical imaging solutions, and announced new infrastructure investments across Brazil, Italy, Mexico, and Sweden.
Google Cloud captured a 10 percent market share, achieving the fastest growth at 36 percent year on year.
Google Cloud reported an increased revenue backlog of US$86.8 billion, up 10 percent sequentially.
Google Cloud enhanced its Vertex AI platform, with Gemini API usage surging nearly 14-fold in six months, and introduced the GenAI Partner Companion to aid service partners.
Google Cloud has committed over US$7 billion to data center investments in Q3, with US$6 billion allocated to U.S.-based projects.
AI’s Growing Role in Cloud Market Expansion
The acceleration in cloud market growth is largely attributed to hyperscalers’ investments in AI infrastructure and solutions, which are now a core revenue driver:
High-performance computing demands have risen due to widespread adoption of generative AI and machine learning tools.
Providers are over-investing in AI infrastructure to meet anticipated future demand, ensuring scalability while mitigating risks of under-preparedness.
Rachel Brindley, Senior Director at Canalys, emphasized the importance of balancing aggressive AI investments with cost discipline to sustain long-term growth.
Future Outlook
As AI technologies continue to mature, cloud providers are increasingly integrating advanced AI models into core services to enhance functionality, improve customer engagement, and unlock new revenue streams. With substantial ongoing capital expenditures and expanding product portfolios, AWS, Microsoft Azure, and Google Cloud are expected to sustain their growth trajectories into 2025 and beyond.
