Global spending on cloud infrastructure services reached $110.9 billion in Q4 2025, reflecting year-on-year growth of 29%.
This is according to market research company Omdia, which notes that 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, the firm notes that 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.
According to the firm, during the quarter, Amazon Web Services (AWS) saw spending growth accelerate to 24%, while Microsoft Azure and Google Cloud recorded strong year-on-year spending growth of 39% and 50%, respectively.
It notes that artificial intelligence (AI) demand is no longer confined to specialised compute such as GPUs, but is also driving broader infrastructure demand across CPUs, storage and networking.
As enterprise AI adoption increasingly centres on agents, workflows and data integration, organisations require infrastructure environments that can be effectively orchestrated, scaled and governed, says Omdia.
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, it explains.
Booming capital spend
Meanwhile, it adds, 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, says the firm.
It points out that 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 by 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, says the firm.
“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,” says 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, Omdia says 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.”
For example, Omdia notes AWS has introduced productised agent offerings, while Microsoft is extending agents into cloud operations and application modernisation workflows.
Market leaders
According to the firm, AWS remained the leader in the global cloud infrastructure market in Q4 2025, 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.
Omdia adds that AWS stated that Amazon Bedrock had reached a multi-billion-dollar annualised run rate, with customer spending increasing 60% quarter-on quarter. In December 2025, AWS introduced Nova Forge, enabling enterprises to incorporate proprietary data during the early training stages of Amazon Nova models to build customised foundation models, known as Novellas.
“This supports deeper model customisation for enterprise AI agents. AWS has also introduced productised agent solutions, including Kiro, Amazon Quick, Transform and Connect, helping translate AI model capabilities into tangible business value. Meanwhile, AWS continues to expand its global infrastructure footprint, with ongoing investment in data centre capacity across Europe and the United States to support growing demand for AI compute.”
The firm sates that Microsoft Azure remained the world’s second-largest cloud service provider in Q4 2025, 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, adding models such as Mistral Large 3, GPT-5.2 and Claude Opus 4.6, further reinforcing its position as an enterprise-grade multi-model AI platform.
Google Cloud held its position as the world’s third-largest cloud service provider in Q4 2025, delivering robust year-on-year growth of 50% and expanding its market share to 12%.
By the end of the quarter, Google Cloud reported a total backlog of $240 billion, up sharply from $157.7 billion in Q3, underscoring improved demand visibility. In January 2026, Google entered a multi-year partnership with Apple to develop the next generation of Apple Foundation Models leveraging Gemini models and Google Cloud technologies.
Omdia says Google Cloud has continued enhancing its enterprise AI platform, Vertex AI, with additions including Gemini Embedding, Gemini 3.1 Pro and Nano Banana Pro/2 to further strengthen enterprise capabilities in retrieval, complex reasoning and multimodal generation.
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