Trends
GenAI explodes cloud service budgets, up 19% YOY to $78 billion
Global cloud infrastructure spending in Q4 2023 surged by 19%, reaching $78.1 billion, driven by investments in generative AI.
Headline
Global cloud infrastructure spending in Q4 2023 surged by 19%, reaching $78.1 billion, driven by investments in generative AI.
Context
On February 27th, according to the latest report released by the market research firm Canalys, global spending on cloud infrastructure services in the fourth quarter of 2023 reached $78.1 billion, an increase of $12.3 billion, a year-on-year growth of 19%. In 2023, total spending on cloud infrastructure services increased from $247.1 billion in 2022 to $290.4 billion, an increase of 18%. Leading cloud providers steadily increased their investments in generative AI , expecting to leverage its capabilities to foster new opportunities in cloud consumption.
Evidence
Pending intelligence enrichment.
Analysis
Canalys predicts that global spending on cloud infrastructure services will grow by 20% in 2024, compared to 18% in 2023. In the fourth quarter of 2023, the top three cloud providers, Amazon Web Services (AWS), Microsoft Azure , and Google Cloud , collectively grew by 21%, accounting for 66% of total spending. Microsoft Azure and Google Cloud saw strong revenue growth this quarter, with year-on-year growth rates exceeding 25% for both. Microsoft’s growth rate of 30% significantly outpaced the market, continuing to narrow the gap with AWS. Also read: Amazon plans two AWS data centres for $10 billion in Mississippi The growth rate of market leader AWS has improved compared to previous quarters, but year-on-year growth of 13% still lags behind Microsoft Azure and Google Cloud. Canalys analyst Yi Zhang stated: AWS’s progress in AI is slower than its main competitors, which may explain why its growth rate is not as rapid as Azure and GCP.
Key Points
- In Q4 2023, global spending on cloud infrastructure services reached $78.1 billion, marking a 19% year-on-year growth.
- Major cloud providers, including AWS, Microsoft Azure, and Google Cloud, collectively grew by 21%, capturing 66% of total spending.
- Investments in generative AI by leading providers, particularly Microsoft and Google, signal a strategic focus on leveraging AI capabilities to drive growth in cloud consumption and integration with mainstream software products.
Actions
Pending intelligence enrichment.
