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Global cloud spending hits record high as AI demand fuels growth surge

Global spending on cloud infrastructure services reached $84 billion in Q3 2024, marking a 23% year-over-year increase, according to Synergy Research Group. This surge adds $15.7 billion over last year, largely fueled by the demand for generative AI applications.

Despite ongoing economic challenges, the cloud services market remains strong, with demand continuously pushing spending to new highs.

Amazon Web Services (AWS) maintained its lead with a 31% global market share, while competitors Google and Microsoft reported faster growth year-over-year. Google holds 20% of the market, and Microsoft stands at 13%. Together, these three giants now control nearly 70% of the public cloud market, underscoring their dominance and the increasing adoption of cloud services across industries.

Notably, Infrastructure as a Service (IaaS) and Platform as a Service (PaaS)—making up the bulk of the market—saw a 24% increase in Q3. Meanwhile, several second-tier providers, including Oracle, Huawei, Snowflake, and Cloudflare, are showing strong growth rates, making them increasingly competitive in the cloud space.

In terms of regions, the U.S. remains the largest cloud market, far outpacing the entire Asia-Pacific region. U.S. cloud spending grew by 23% this quarter.

Additionally, Europe performed well, with the U.K. and Germany leading. Within Europe, Ireland, Italy, and Spain posted the highest growth rates. Globally, emerging markets like India, Japan, Brazil, and Italy reported growth above the global average, indicating widespread cloud adoption.

Synergy Research estimates Q3 cloud infrastructure revenue—including IaaS, PaaS, and hosted private cloud services—at $83.8 billion, with the trailing twelve-month total reaching $313 billion.

Over the past year, the market added approximately $16 billion, a significant increase compared to the prior year’s $10 billion gain. Chief Analyst John Dinsdale attributes much of this growth to AI advancements. “Artificial intelligence has truly accelerated cloud growth,” he stated. “AI-driven demand creates new revenue streams and enables major providers to invest more in underlying technology.”

AI’s impact on the cloud sector is proving transformative, creating a feedback loop where AI demand increases cloud revenue, which in turn supports further innovation. This trend is reshaping the industry, with providers expanding offerings to meet demand from businesses seeking a competitive edge through machine learning and generative AI.

With ongoing digital transformation and advances in AI research, cloud providers are well-positioned to meet future demand growth, according to Synergy Research.

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