Cloud Infrastructure Spending Rose 22 Percent in 2Q25

Global spending on cloud infrastructure services reached $95.3 billion in the second quarter of 2025, up 22% year on year, according to Canalys. Market momentum remained stable, with year-on-year growth exceeding 20% for the fourth consecutive quarter.

Cloud demand increased due to AI consumption, revived legacy migrations, and cloud-native scale-ups. As hyperscalers advance their AI capabilities and applications, more customers are adopting multi-model approaches to meet specific cost and use-case requirements. In 2Q25, AWS, Microsoft Azure, and Google Cloud retained their rankings from the previous quarter, with their combined market share accounting for 65% of global cloud infrastructure spending. Collectively, customer spending with these three hyperscalers increased 27% year on year.

Microsoft Azure and Google Cloud delivered gains significantly exceeding 30%, while market leader AWS posted growth of 17%, consistent with the previous quarter. In actual dollar terms, however, AWS’s increase outpaced that of both Microsoft and Google Cloud.  Hyperscalers are experiencing a significant increase in customer demand, with growth driven by AI-related workloads alongside a rebound in traditional migrations and continued capacity expansion by cloud-native enterprises. Investment in AI infrastructure continues to accelerate. In July, Google lifted its 2025 capital expenditure target from $75 billion to $85 billion. Earlier, AWS projected total spending for 2025 to exceed $100 billion, while Microsoft announced plans to invest approximately $80 billion in infrastructure expansion in the current fiscal year.

“Customer demand for AI services is evolving from a primary focus on availability and ease of use to a greater emphasis on flexibility and fit-for-purpose model choice,” said Yi Zhang, Senior Analyst at Canalys. “An increasing number of enterprises are seeking the capability to switch between different AI models based on specific business requirements, enabling them to achieve an optimal balance of performance, cost, and application fit.” Amid this trend, AWS Bedrock, Azure AI Foundry, and Google Vertex AI continue to broaden their portfolios of proprietary and third-party models, spanning the full spectrum of capabilities from high-complexity reasoning to low-latency response, thereby supporting a wider range of industries and workloads.

“‘Coopetition’ has become the norm in the generative AI landscape: vendors compete on model advancement and product capabilities even as they collaborate on compute capacity and model distribution,” said Rachel Brindley, Senior Director at Canalys. “For example, AWS Bedrock aggregates models such as Anthropic’s Claude and OpenAI’s GPT, while OpenAI has added Google Cloud to its compute network to bolster capacity. By sharing resources and leveraging complementary strengths, vendors aim to accommodate accelerating demand.” 

Amazon Web Services (AWS) led the global market in 2Q25 with a 32% share and 17% year-on-year revenue growth. Its growth has remained largely steady since Q1 2024, ranging from 17% to 19% year on year over the past six quarters. It reported a total backlog of $195 billion as of 30 June, up 25% year on year, underscoring sustained demand. Microsoft Azure remained the world’s second-largest cloud provider in Q2, with a 22% market share and impressive 39% year-on-year growth. This growth was driven by the migration of traditional workloads to Azure, the continued scaling of application deployments by cloud-native enterprises, and the rapid adoption of AI workflows. Google Cloud, the world’s third-largest cloud service provider, recorded robust year-on-year growth of 34%, increasing its market share to 11%. Growth was supported by strong deal momentum.