Text/Yang Jianyong

Generative AI stands as the primary catalyst propelling the expansion of the global cloud services market. Throughout 2025, enterprise spending on cloud infrastructure services soared to an impressive $419 billion, marking the highest growth rate in three years.

As the leading cloud service providers worldwide, Amazon, Microsoft, and Google collectively command a 63% market share, with individual shares of 28%, 21%, and 14%, respectively. This dominance solidifies their competitive positions in the global cloud services arena.

To bolster their cloud market competitiveness, these giants continue to ramp up spending, with capital expenditures skyrocketing. Amazon’s full-year capital expenditure is projected to hit $200 billion (approximately RMB 1.39 trillion), Google’s $180 billion (approximately RMB 1.25 trillion), and Microsoft’s around $150 billion (approximately RMB 1.04 trillion), culminating in a staggering cumulative total of approximately $530 billion (approximately RMB 3.68 trillion).

Remarkably, these three major cloud vendors have successively delivered outstanding financial results, showcasing robust growth in both revenue and profitability. However, despite being AI-driven and experiencing sustained operational improvements, they have failed to win over Wall Street, particularly Microsoft, which witnessed a significant decline, with its market capitalization dipping below $3 trillion.

Microsoft

In the second quarter of fiscal year 2026, ending December 31, 2025, Microsoft reported total revenue of $81.3 billion, up 17% year-over-year, and net income of $38.5 billion, up 60% year-over-year.

During this period, Microsoft’s cloud revenue reached $51.5 billion, up 26% year-over-year, with revenue from the Intelligent Cloud segment hitting $32.9 billion, up 29% year-over-year. Among this, Azure and other cloud services revenue surged by 39% year-over-year, with AI serving as the driving force behind this cloud service growth.

Despite these strong financials, Microsoft failed to impress Wall Street, particularly due to concerns over slowing cloud business growth. This led to a 9.99% drop on the day of the earnings release, resulting in a market capitalization loss of $357.4 billion (approximately RMB 2.48 trillion). After several days of decline, its market capitalization fell below $3 trillion, currently standing at $2.98 trillion.

Previously, Microsoft’s market capitalization had soared past the $4 trillion mark, thanks to the impressive performance of its Azure business, setting a new milestone in its commercial history and making it the second company globally, after NVIDIA, to cross the $4 trillion threshold. Now, it has decreased by $1.17 trillion from its historical peak.

The sustained surge in capital expenditures and concerns over slowing growth in Azure and other cloud services have triggered a market sell-off. Microsoft’s quarterly capital expenditures reached $37.5 billion, estimating an annual spending of approximately $150 billion.

Crucially, Microsoft’s cloud business is deeply intertwined with OpenAI, causing its cloud business’s commercial remaining performance obligations to more than double year-over-year, reaching $625 billion, with nearly half contributed by OpenAI. This has led to a sell-off by Wall Street.

Amazon

As the leader in the global cloud services market, Amazon’s strong financial results failed to prevent its market value from continuing to decline, currently standing at only $2.25 trillion.

Throughout 2025, Amazon reported total revenue of $716.9 billion, up 12% year-over-year, and net income of $77.7 billion. Not only did revenue hit a record high, but it also surpassed Walmart in terms of revenue scale. It’s worth noting that Walmart has consistently held the title of the world’s highest-revenue company for over a decade.

Amazon’s cloud services are a significant profit driver, with their revenue share continuously increasing. Throughout 2025, Amazon’s revenue from its AWS cloud segment reached $128.7 billion (approximately RMB 893 billion), up 20% year-over-year, with an operating profit of $45.6 billion. Among this, AWS’s backlog totaled $244 billion (approximately RMB 1.7 trillion), up 40% year-over-year.

Amazon President and CEO Andy Jassy stated that given the strong market demand for technologies such as artificial intelligence, chips, and robotics, the company expects to invest approximately $200 billion in capital expenditures in 2026. However, this massive spending and AWS’s growth rate directly alarmed the market, leading to a significant decline.

Google

Among the world’s top three cloud service providers, Google delivered the most impressive performance. Throughout 2025, revenue reached $402.8 billion, up 15% year-over-year, with net income of $132.1 billion, up 32% year-over-year, exceeding both revenue and profit expectations.

As the world’s third-largest cloud service provider, Google Cloud continued its rapid growth trajectory. In Q4 2025, revenue reached $17.66 billion, up 48% year-over-year. Throughout 2025, Google Cloud’s total revenue exceeded $70 billion (approximately RMB 490 billion), with a backlog of $240 billion, more than doubling year-over-year.

Driven by AI demand, Google shows strong demand for enterprise AI infrastructure and AI solutions. Investments in artificial intelligence infrastructure are comprehensively driving Google’s revenue growth, especially the strong growth of Google Cloud. Therefore, Google will continue to increase capital expenditures to enhance its competitiveness in the AI market and seize growing opportunities.

In 2026, Google’s capital expenditures are expected to reach $175-185 billion, a significant increase from $91.45 billion in 2025, primarily for AI infrastructure construction such as servers, data centers, and network equipment.

Thanks to significant investments in artificial intelligence, Google has become the hottest AI company in the capital market.

Finally, artificial intelligence stands as the core driving force behind the growth of the global cloud services market, helping to boost revenue growth for cloud computing companies and unlock growth potential.

Microsoft has achieved remarkable success in the field of artificial intelligence, investing in OpenAI and deeply integrating with it. At the same time, it has built Azure AI infrastructure, increasing Azure cloud services’ market share to 21% over several years, making it the world’s second-largest public cloud provider.

Despite lagging behind Amazon and Microsoft in cloud services market share, Google continues to ramp up its technological investments in the global cloud services competition, especially in large models, enhancing its competitiveness and giving it the opportunity to capture more market share. Meanwhile, Google Cloud’s performance has drawn significant attention from all sectors, serving not only as a growth engine for Google’s overall performance but also as one of the core factors supporting its performance in the capital market.

In the era of AI large models, in the cloud services market, Amazon is increasingly struggling to compete against Microsoft and Google, with its market share gradually being eroded by competitors.

Yang Jianyong, a contributor to Forbes China, expresses views that represent his own. He is dedicated to in-depth interpretations of cutting-edge technologies such as AI large models, artificial intelligence, the Internet of Things, cloud computing, and smart hardware.