Dive Brief:
- Global cloud spending on infrastructure services grew 29% year over year in Q4 2025, reaching $110.9 billion as hyperscalers increased AI infrastructure capacity investments to support growing enterprise demand, according to a Thursday report from analyst firm Omdia.
- Enterprise AI adoption is surging toward agentic, a shift requiring infrastructure that can be scaled and operated effectively, further reinforcing hyperscalers’ position as the “operational foundation for AI,” according to Omdia. AWS, the dominant provider in terms of market share, saw revenue increase 24% during the quarter, while Microsoft Azure and Google Cloud recorded 39% and 50% year over year growth, respectively.
- “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,” Rachel Brindley, senior director at Omdia, said in the report.
Dive Insight:
Global spend on cloud infrastructure services shows no signs of slowing down, with Omdia predicting a 27% increase this year.
Hyperscalers will focus on resource efficiency, infrastructure scale and the strength of AI agent offerings to differentiate from the competition.
“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,” Brindley said.
Differentiation remains key for vendors as they roll out new agentic AI platforms or update existing offerings to appeal to customers.
At the Nvidia GTC conference earlier this month, Google, Microsoft and AWS announced expanded partnerships with Nvidia, highlighting the companies’ dependency on the chipmaker for the same critical AI components, according to Alan Pelz-Sharpe, founder of market research firm Deep Analysis.
However, AI demand isn’t confined to specialized compute hardware such as GPUs, according to Omdia. The technology is driving broader infrastructure demand across CPUs, storage and networking, which is pushing hyperscalers to raise capital expenditure guidance for AI infrastructure expansion. Together, Amazon, Microsoft and Google are planning to invest more than $500 billion in capital expenditures for AI infrastructure in fiscal year 2026.
Despite the continued surge in hyperscaler infrastructure spending, data center construction rates fell for the first time in six years during the second half of 2025. Data center construction has been constrained by power and electrical equipment availability, adding emphasis to targeted and efficient expansion.
Beyond infrastructure scale and model access, AI agents will continue to be an area of vendor competition, according to Omdia. Amazon has released offerings such as AWS Transform, using AI agents to help with modernization projects, while Microsoft has expanded the use of agents for app modernization and cloud operations.
“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,” Yi Zhang, senior analyst at Omdia, said in the report. “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.”
Disclosure: Informa owns a controlling stake in Informa TechTarget, the publisher behind CIO Dive and parent company of Omdia. Informa has no influence over CIO Dive’s coverage.
