• The major hyperscalers have reported their first-quarter 2025 financials
• Synergy Research Group has collected all the data
• AI workloads have fuelled a 23% year-on-year increase in the value of the global cloud infrastructure services sector to almost $94bn

While the hyperscalers might be rethinking some of their investment plans, the world’s enterprises aren’t holding back on their AI-fuelled cloud infrastructure services spending, with Synergy Research Group estimating that the value of the sector leaped by almost 23% year on year in the first quarter of 2025 to $93.9bn, up by an incredible $17.5bn. 

That first-quarter figure puts the value of the sector at $348.1bn for the 12 months to the end of March this year. 

And according to Synergy Research, that reported first-quarter growth rate is negatively impacted by currency conversion rate fluctuations: At constant currency rates, the year-on-year increase is closer to 25%, “providing a more accurate reflection of actual underlying growth,” according to the analyst firm. 

Another statistic that puts the impact of AI into perspective is the increase in value of the cloud infrastructure services sector since OpenAI’s ChatGPT introduced generative AI (GenAI) to the global mass market 29 months ago: According to Synergy Research, the sector’s value has grown by an astonishing 52% since the end of 2022. 

“We continue to see strong revenue and growth numbers coming out of the cloud market, with a major acceleration of growth over the last six quarters. All of the leading cloud providers are posting some impressive numbers,” stated John Dinsdale, a chief analyst at Synergy Research Group. “While the growth is broad based across geographies and services, clearly AI is making a big difference. We saw growth of 140% to 160% in GenAI-specific services, with AI also contributing to service enhancements and added growth across the broader portfolio. The capex numbers are huge, but so are the incremental revenues,” he added.

As Dinsdale noted, the cloud infrastructure services market, which includes infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and hosted private cloud services, is growing strongly in all regions, according to the Synergy Research Group team, though the US remains by far the largest market (its value is greater than that of the whole Asia Pacific region). “When measured in local currencies, the major countries with the strongest growth included Brazil, Spain, Italy, South Korea, India, Australia and Indonesia, all growing at rates above the worldwide average,” noted the analyst firm. In Europe, the UK and Germany are the largest cloud services markets, but the major markets with the highest year-on-year growth rates in the first quarter were Ireland, Spain and Italy.

With most of the major cloud providers having now released their earnings data for Q1, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) stood at $93.9bn, with trailing 12-month revenues reaching $348.1bn. Public IaaS and PaaS services account for the bulk of the market and those grew by 24% in Q1 – or by 26% if measured in constant currency. The dominance of the major cloud providers is even more pronounced in public cloud, where the top three account for 68% of the market. Geographically, the cloud market continues to grow strongly in all regions of the world. 

One thing that remains constant in the sector is the market-leader ranking, with Amazon Web Services (AWS) – which has just reported first-quarter revenues of $29.27bn – still top of the pile boasting a market share of 29%, followed by Microsoft Azure on 22% and Google Cloud on 12%. The next-largest players are Alibaba (4%) and Oracle (3%). 

The Synergy research team notes that, among the tier-two cloud providers, those with the highest growth rates include CoreWeave, Oracle, Databricks, Snowflake, Cloudflare and Huawei. “From a virtual standing start two years ago, CoreWeave is now on the verge of breaking into the top-12 ranking of cloud providers, thanks to its AI and GPU services,” noted the analyst firm. 

- Ray Le Maistre, Editorial Director, TelecomTV