AI Helps Cloud Market Growth Rate Jump to Almost 25% in Q1

RENO, NV, May 1, 2025

New data from Synergy Research Group shows that Q1 enterprise spending on cloud infrastructure services increased to $94 billion worldwide. This was up $17.5 billion or 23% from the first quarter of 2024 but were it not for fluctuations in currency exchange rates over the past year, the growth rate would have been closer to 25%. This constant currency-based figure is a more accurate reflection of actual underlying growth. Since ChatGPT was launched and generative AI started to have a profound impact on the IT ecosystem, the cloud market growth rate has increased by around seven percentage points. The market has grown by 52% since the end of 2022. In terms of competitive positioning, Amazon maintains a strong lead in the market though Microsoft and Google once again had higher percentage growth numbers. Their Q1 worldwide market shares were 29%, 22% and 12% respectively. 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 twelve ranking of cloud providers, thanks to its AI and GPU services. 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) were $93.9 billion, with trailing twelve-month revenues reaching $348.1 billion. 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. 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. The US remains by far the largest cloud market, with its scale far surpassing the whole APAC region. The US market grew by 24% in Q1. In Europe the largest cloud markets are the UK and Germany, but the big markets with the highest growth rates were Ireland, Spain and Italy.

“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,” said 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 140-160% 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.”