Cloud Infrastructure Spending Rose 29 Percent in 4Q25

Global spending on cloud infrastructure services reached $110.9 billion in 4Q25, reflecting year-on-year growth of 29%, according to Omdia. Growth accelerated from the previous quarter, marking the sixth consecutive quarter in which the market expanded by more than 20%.

As enterprise AI demand shifts from experimentation to production deployment, hyperscalers are increasing investment to expand AI infrastructure capacity. Looking ahead to 2026, Omdia forecasts that global cloud infrastructure services spending will grow by 27%, with competitive differentiation increasingly shaped by infrastructure scale, capital efficiency, and the strength of AI agent-related platform capabilities.

During the quarter, AWS’s growth accelerated to 24%, while Microsoft Azure and Google Cloud recorded strong year-on-year growth of 39% and 50%, respectively. AI demand is no longer confined to specialized compute such as GPUs, but is also driving broader infrastructure demand across CPUs, storage, and networking. As enterprise AI adoption increasingly centers on agents, workflows, and data integration, organizations require infrastructure environments that can be effectively orchestrated, scaled, and governed. This reinforces the role of cloud platforms as the operational foundation for AI, while continuing to support the migration of both traditional and emerging workloads to the cloud.

Meanwhile, AWS, Microsoft, and Google Cloud all reported backlog growth, pointing to sustained demand and continued enterprise investment in AI and cloud infrastructure. Rising demand is also prompting hyperscalers to step up capital spending to accelerate AI infrastructure expansion. AWS expects capital expenditure to reach $200 billion in 2026, more than 50% above the nearly $132 billion recorded in 2025. Microsoft reported quarterly capital expenditure of $37.5 billion, up nearly $15 billion year-on-year. Google, meanwhile, raised its 2026 capital expenditure guidance to between $175 billion and $185 billion, more than double the prior year’s level.

“For cloud vendors, the challenge is no longer just about scaling capacity quickly enough to meet surging demand, but about doing so with discipline across investment pace, resource allocation, and global operational efficiency,” said Rachel Brindley, Senior Director at Omdia. “As AI continues to raise infrastructure requirements while constraints remain, vendors that can expand in a more targeted and efficient way will be best positioned to lead in the next phase of competition.”

At the same time, competition is increasingly extending beyond model access and infrastructure scale toward the application layer, particularly in the development and deployment of AI agents. “For enterprise customers, the key question is whether these capabilities can be embedded into existing systems, workflows, and data environments, and then scaled reliably in production,” said Yi Zhang, Senior Analyst at Omdia. “This is pushing cloud vendors to invest more heavily in tool governance, workflow orchestration, and deployment capabilities, helping AI move closer to operational use at scale.”

AWS remained the leader in the global cloud infrastructure market in 4Q25, with a 32% market share and 24% year-over-year revenue growth, up from the previous quarter.  It ended Q4 with a total backlog of $244 billion, underscoring sustained demand. Microsoft Azure remained the world’s second-largest cloud service provider, with a 22% market share and year-on-year revenue growth of 39%. Since December 2025, Microsoft has continued to expand the range of models available in Azure AI Foundry. Google Cloud held its position as the world’s third-largest cloud service provider in 4Q25, delivering robust year-on-year growth of 50% and expanding its market share to 12%. By the end of the quarter, it reported a total backlog of $240 billion, up sharply from $157.7 billion in Q3, underscoring improved demand visibility.