Global spending on cloud infrastructure services climbed by 21 per cent during the third quarter of 2024, reaching $82 billion, according to technology industry analysts Canalys.
The surge was fuelled by heightened investments in artificial intelligence (AI) by the leading cloud providers, driving growth and innovation in the sector.
Amazon Web Services (AWS), Microsoft Azure, and Google Cloud maintained their positions as the top three cloud providers, collectively capturing 64 per cent of the market.
Spending with these three providers grew by 26 per cent year-on-year, with all reporting sequential growth.
AWS, the market leader, achieved 19 per cent annual revenue growth, consistent with the previous quarter.
However, Microsoft Azure and Google Cloud outpaced AWS with respective growth rates of 33 per cent and 36 per cent.
Despite this, AWS added $4.4 billion in sales over the past year, outperforming its rivals in dollar terms.
“AI is increasingly becoming a cornerstone of cloud providers’ strategies,” said Rachel Brindley, Senior Director at Canalys. “The race to capitalise on AI opportunities is driving substantial investments in next-generation infrastructure.”
AWS retained its dominant position with a 33 per cent market share, bolstered by its advanced AI offerings, including new models from Amazon Bedrock and SageMaker.
Its AI-related revenues saw triple-digit growth, far outpacing overall performance. AWS plans to invest approximately $75 billion in 2024, focusing on expanding infrastructure to meet the soaring demand for AI services.
Microsoft Azure, holding a 20 per cent market share, reported impressive AI-related growth, which accounted for 12 per cent of its annual increase.
The use of Azure OpenAI services more than doubled over six months, spurred by enterprises transitioning AI applications into full-scale production.
Microsoft is also expanding its presence in emerging markets with new investments in countries such as Brazil and Sweden.
Google Cloud experienced the fastest growth, rising 36 per cent year-on-year to maintain a 10 per cent market share.
Its enterprise AI platform, Vertex, drove significant adoption, with API calls surging 14-fold in the past six months.
Google announced over $7 billion in data centre investments, with $6 billion earmarked for the United States.
Yi Zhang, Analyst at Canalys, highlighted the providers’ focus on refining their AI models.
“The leading cloud vendors are rapidly iterating their AI foundational models, aiming to integrate them into core services to enhance functionality, performance, and user engagement,” Zhang said.
As competition intensifies, the hyperscalers are adopting aggressive investment strategies to prepare for long-term demand.
Analysts warn, however, that balancing innovation with financial discipline will be critical.
“Companies must ensure the sustainability of these investments to maintain long-term health and competitiveness,” Brindley added.
With AI continuing to drive cloud adoption, the market shows no signs of slowing.
Canalys expects this growth trajectory to persist into 2025 as cloud providers scale their infrastructure and expand product portfolios to meet evolving customer needs.
