Canalys, the tech market analysis firm, has found that spending on global cloud infrastructure services rose 20% last year, up from $267.7 billion (£211bn~) in 2023, to $321.3bn (£254bn~) in 2024. Further, in Q4 2024, spending also rose 20% year-on-year to $86bn (£68bn~).

A key driver for the growth was the expansion of AI models, which significantly accelerated cloud adoption, noted the research firm. By the second half of last year, the top cloud vendors reported positive returns on AI investments, with AI applications having a notable impact on their overall cloud business performance.

In terms of how the leading cloud providers fared last quarter, the ranking of the top three vendors—AWS, Microsoft Azure, and Google Cloud—remained unchanged from Q3 2024, with their combined market share accounting for 64% of global cloud spending.

Market leader AWS maintained an annual growth rate of 19%, which was consistent with the prior quarter. Canalys stated that Microsoft Azure and Google Cloud had a slight decline on their year-on-year growth rates compared with the previous quarter, however. The research firm said this slowdown was primarily due to strong AI-driven demand outpacing supply, as the leading cloud providers reported that growth remained constrained by limited capacity, creating a tight supply-demand balance.

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With AI becoming more and more efficient and widely adopted, demand is expected to grow exponentially. Cloud hyperscalers are making significant investments to grow AI model training, deployment, and cloud-based applications globally, the research firm explained.

Amid plans from cloud hyperscalers to further expand investments in cloud and AI infrastructure to keep pace with rising demand, Canalys has forecasted that global cloud infrastructure services spending will continue to grow—by around 19% in 2025.

Speaking on this, Yi Zhang, analyst at Canalys, said: “Cloud hyperscalers are investing at an unprecedented rate.” Zhang continued: “The race is no longer just about offering the best AI services—it’s about growing fast while ensuring financial sustainability and long-term competitiveness.”