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    Home » GenAI explodes cloud service budgets, up 19% YOY to $78 billion
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    GenAI explodes cloud service budgets, up 19% YOY to $78 billion

    By Chloe ChenFebruary 27, 2024No Comments2 Mins Read
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    • 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.

    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.

    Global spending on cloud infrastructure services will grow by 20% in 2024

    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

    AWS’s progress in AI is slower compared to others

    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.

    The integration of generative AI with mainstream software products is accelerating, which will expedite the commercialization of generative AI applications. Google recently introduced its rebranded AI model Gemini into Workspace applications such as Gmail and Docs, while Microsoft launched Copilot for Microsoft 365 last November, embedding its generative AI platform into Word, Excel, and other office applications.

    cloud service Generative AI
    Chloe Chen

    Chloe Chen is a junior writer at BTW Media. She graduated from the London School of Economics and Political Science (LSE) and had various working experiences in the finance and fintech industry. Send tips to c.chen@btw.media.

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