Cloud computing in 2025 is on a fast track for record growth and transformation. With AI adoption skyrocketing, hyperscaler competition intensifying, and enterprise IT strategies shifting toward hybrid and multicloud strategies, this year is poised to bring exciting new developments to the space. The global public cloud services market is projected to grow by 21.5% in 2025, reaching $723 billion, with all cloud segments expected to see double-digit growth.
Below, we explore dominant global trends driving the cloud computing market this year — including AI integration, edge computing, quantum computing, cloud security, and sustainability. Additionally, we discuss regional developments, as well as the key players in the cloud computing space. Using exclusive content from the AlphaSense platform, we provide a comprehensive overview of the cloud computing market in 2025, helping you stay ahead and navigate this evolving landscape with ease.
Artificial Intelligence Integration
In 2025, artificial intelligence is deeply intertwining with cloud platforms at all levels — from AI-optimized infrastructure to platform services. Major cloud vendors are racing to differentiate themselves with AI, and particularly, are incorporating retrieval-augmented generation (RAG) solutions to improve their generative AI services. This convergence of AI and cloud computing is transforming how enterprises — especially corporate and financial services — operate, innovate, and scale. It enables advanced use cases across industries — fraud detection and algorithmic trading in finance, diagnostics in healthcare, and AI agents in customer service, to name a few.
AI helps enterprises automate workflows, reduce human error, and improve operational efficiency. However, they require massive amounts of clean data to build and run customized models, identify patterns, and predict future trends. AI workflows also require sizable amounts of compute power and dynamic infrastructure — which most companies cannot build or maintain in-house.
Cloud platforms help organizations handle and organize the immense amounts of structured and unstructured data, as well as provide on-demand access to high-memory compute. For that reason, AI-as-a-service is a major cloud paradigm in 2025. With this model, AI capabilities are offered as modular, scalable, and on-demand services that are delivered via the cloud — eliminating the need for companies to build, train, or host models in-house.
Edge Computing and Distributed Cloud Architecture
In today’s fast-paced environment, getting access to actionable insights quickly requires real-time analytics — which has fueled the rise of edge computing. Edge computing enables near-instant processing by deploying processing nodes closer to users or devices, rather than sending all data to centralized data centers. To that end, cloud providers are increasingly offering more distributed cloud models, where their services can run in regional zones, telecom networks, and on-premises edge devices. For enterprises, this means improved performance and reliability, accelerated access to insights, reduced latency, and enhanced efficiency. The number of edge data centers is expected to grow to 1,200 by 2026, compared to just under 250 centers in 2022.
At the same time, the continued deployment of 5G networks is further accelerating edge adoption, as the two technologies are highly synergistic in supporting low-latency, high-bandwidth, and real-time processing demands. 5G enables data to be delivered at lightning speeds between devices and edge servers.
Quantum Computing
Quantum computing is still in its infancy, but it’s emerging as a new and exciting cloud provider offering. All major cloud providers now host quantum computing resources or simulators accessible on-demand — AWS’s Amazon Braket, Microsoft’s Azure Quantum, IBM’s Quantum Services, and Google’s partnership with IonQ.
Financial institutions are currently experimenting with quantum algorithms for portfolio optimization, risk analysis, and encryption. In the future, this technology is expected to accelerate R&D in the healthcare and pharma space by providing scalable access to qubits (basic units of information) and quantum development kits.
While quantum computing is not yet mainstream, the enterprises laying the groundwork for its adoption are setting themselves up for a competitive advantage and tangible economic benefit in the long run.
Cloud Security and Regulatory Developments
As cloud usage grows, security is a top concern for enterprises. With the threat landscape constantly expanding, organizations are investing in advanced cloud security solutions. Forrester predicts that by the end of 2025, around 40% of organizations will rely on third-party specialized security platforms, rather than sticking with their hyperscaler’s native security capabilities.
Another emerging trend is “cyberstorage,” which protects data by fragmenting and distributing it across different locations, which can help mitigate ransomware and other storage-based threats. In order to stay vigilant, enterprises are also adopting strategies such as zero-trust frameworks — assuming no user or device is automatically to be trusted, strict access controls, and continuous monitoring of cloud environments for anomalies.
In 2025, there is also heightened attention to data sovereignty – ensuring that data stored in the cloud is subject to the laws and privacy regulations of the appropriate jurisdiction. This is partly driven by expansions of data protection laws (GDPR in Europe; new privacy laws in regions like APAC and Latin America) and by regulators’ concerns over concentration risk (e.g. too many banks relying on a single cloud provider).
Sustainability and Green Cloud Initiatives
Sustainability has become a core consideration in cloud computing strategies, driven by both corporate ESG goals and client demand for environmentally responsible IT. In 2025, both cloud providers and customers are ramping up initiatives to reduce the carbon footprint of cloud operations.
This is heightened by the growing recognition that cloud computing, if managed properly, can be more energy-efficient than traditional on-premises data centers – thanks to massive scale (which enables optimized cooling and power use) and the ability to dynamically scale down resources when not needed.
Hyperscalers are setting ambitious sustainability goals for the near future. Amazon (AWS) recently announced it has achieved 100% renewable energy usage, five years ahead of schedule. AWS is investing in solar and wind farms worldwide and aims to be net-zero carbon by 2040. It also introduced tools like the AWS Customer Carbon Footprint tool to help users track emissions from their AWS usage. Microsoft Azure has pledged to replenish more water than is consumed across their global operations and to be carbon negative by 2030.
Google Cloud has been carbon-neutral (via offsets) for over a decade and is aiming to run on 24/7 carbon-free energy by 2030 (meaning every hour of every data center’s operation is matched to local clean energy without offsets). Google also provides a Carbon Footprint dashboard for Google Cloud customers and actively encourages moving workloads to regions and times of day that have cleaner energy (“carbon-intelligent computing”).
As green cloud initiatives become increasingly mainstream, cloud providers are competing not just in performance and features, but also in who can hit renewable milestones first. And customers are putting sustainability as a key criterion in cloud vendor selection, with 70% of businesses reporting that they are considering sustainability factors when choosing a cloud provider in 2025.
Regional Cloud Computing Trends
The main regions with cloud computing markets are North America, EMEA, and APAC. These are some of the top trends driving the markets in those areas:
North America
The largest cloud market in the world is in North America, and particularly, in the U.S., due to its being the homeplace of the top global cloud providers — including Amazon, Microsoft, and Google. U.S. financial services and tech firms have been among the earliest adopters of cloud at scale, and that trend continues with increasing cloud budgets for advanced analytics, fintech, and consumer services.
One of the most high-profile indicators of North America’s cloud evolution is the Stargate Project — a multibillion dollar supercomputing data center initiative led by OpenAI in collaboration with Microsoft. The initiative was announced in early 2025 and is expected to be operational by 2028. This project is reportedly designed to power the next generation of frontier AI models and is one of the most ambitious AI infrastructure investments to date.
Outside Stargate, both U.S. and Canadian enterprises are deepening their cloud investments to drive agility and scale — a trend heavily driven by the surge of generative AI adoption. Cloud migration is essentially mainstream — multi-cloud and hybrid strategies are now the norm for large firms, as they seek to avoid vendor lock-in and optimize costs. In North America, financial services lead cloud adoption, though the healthcare, telecommunications, and public sector industries are rapidly increasing their usage as well.
With the introduction of tariffs on Chinese imports this year, the U.S. cloud computing industry will likely experience supply chain disruptions and higher infrastructure costs, though it is not yet clear how extensive those will be.
Europe, Middle East, and Africa (EMEA)
The EMEA region’s cloud market is diverse, balancing Europe’s mature but regulation-heavy landscape, the Middle East’s fast-emerging cloud ambitions, and Africa’s nascent, high-growth adoption. Across EMEA, 2025 trends center on compliance-driven cloud strategies, industry-specific cloud solutions, and local infrastructure investments.
Many European organizations are embracing hybrid and multi-cloud setups – both to optimize costs and to avoid dependence on any one U.S.-based provider. Meanwhile, rapid AI adoption is accelerating demand for cloud infrastructure in Europe.
Adoption in the Middle East is driven by ambitious national digital transformation programs (e.g. Saudi Vision 2030, UAE Centennial 2071), which rely on cloud technology to modernize government services and build smart cities. And in Africa, leading economies such as South Africa, Kenya, and Nigeria are attracting data center investments, providing more businesses with access to local cloud infrastructure.
Asia-Pacific (APAC)
Closely following North America, APAC’s cloud computing market is the fastest-growing in the world, with China, India, Southeast Asia, and Australia driving the most growth. Sectors like finance, telecom, and manufacturing in APAC are leveraging cloud to modernize core systems and launch new digital services (e.g. mobile payments, 5G applications).
India stands out with large-scale cloud adoption across sectors (supported by the government’s “Digital India” push and improved connectivity). Southeast Asia (Indonesia, Vietnam, Thailand, etc.) is seeing tremendous cloud growth as major global companies invest heavily in this market and as local startups and SMEs seek digital transformation to compete regionally. Meanwhile, more mature markets like Japan, South Korea, and Australia are entering a cloud optimization phase: most enterprises are already using cloud, so the focus is now on enhancing cost efficiency and trying out more advanced use cases.
China, which is the single largest APAC market, has consistently high cloud adoption, but this largely comes from domestic providers due to regulatory constraints on foreign services. Chinese company Alibaba is one to watch in this region, as it recently announced that it will invest at least CNY380 billion in cloud computing and AI infrastructure over the next three years, which is comparable to its total investment over the past 10 years.
Across APAC, the promise of scalable tech infrastructure without large capital expense is a powerful motivator for cloud adoption in 2025 and beyond.
Major Cloud Providers and Their Strategic Pivots in 2025
While three big hyperscalers account for about ⅔ of worldwide cloud infrastructure spend, others on the list are rapidly expanding their footprints and gaining traction in global and regional markets. Here’s what to expect from key players in 2025:
Amazon Web Services (AWS)
As the undisputed cloud market leader, AWS is focusing on expansion and customization at scale this year. AWS is forecasted to generate $126.5 billion in revenue in 2025, with a growth rate of 18.3% compared to 2024. This growth is driven by increasing demand for cloud computing, particularly in AI-related workloads.
AWS is expanding their infrastructure this year, planning to build new data centers in the U.S., featuring advanced components designed for energy efficiency and AI optimization. They have also recently signed agreements with high-profile customers, such as the U.S. Army, Intuit, PayPal, Medtronic, and others. Additionally, AWS announced a strategic partnership with Safran, a global aeronautics leader, with the aim of accelerating innovation in the aerospace industry. This underscores AWS’s growing presence in specialized industries, as well as their influence among both large enterprises and government agencies.
Microsoft Azure
The second largest cloud provider in the world is Microsoft Azure, which is a critical revenue driver for tech giant Microsoft. Azure is particularly strong in hybrid cloud environments, and given the rising demand for hybrid strategies, Azure is expected to cement its position as a cloud market leader this year.
In 2025, Microsoft plans to invest around $80 billion to enhance its data center infrastructure, as well as $3 billion over two years to expand its cloud and AI capacity in India. Azure is also expanding its AI ecosystem by hosting models from various developers, including Elon Musk’s Grok AI model, aiming to provide developers with a diverse range of AI tools and models within the Azure platform.
Finally, the multibillion dollar Stargate Project is expected to operate within Microsoft Azure’s cloud ecosystem, which will likely elevate their position as a cloud computing leader.
Google Cloud
Google Cloud is quickly gaining ground in the cloud market, with a slow but steady increase in market share year over year. It’s particularly known for its strengths in data analytics, machine learning, and open source. This year, Alphabet plans to invest approximately $75 billion into expanding data center capacity to support AI initiatives.
Google Cloud is leveraging strategic partnerships to make significant strides in certain industries — such as with Altair to leverage simulation and AI solutions for transformative results, and with government company Knexus to enhance operational efficiencies through AI tools. Google incentivizes top partners through their 2025 Partner Awards, highlighting their contributions to AI-driven solutions, data management, and industry-specific innovations.
Additionally, Google Cloud made 229 announcements at Google Cloud Next 2025, emphasizing advancements in AI, data analytics, and cloud infrastructure.
Alibaba Cloud
As the leading cloud provider in China, Alibaba Cloud is expected to experience even more growth this year, driven by AI investments and innovations, infrastructure investments, and global partnerships. It has committed to investing $52 billion over the next three years to expand its AI and cloud infrastructure, as well as adding new data centers to support international expansion efforts.
In 2025, Alibaba Cloud aims to collaborate with 100 ecosystem partners to develop and provide cutting-edge AI and cloud computing capabilities for businesses worldwide. Despite positive growth prospects, Alibaba Cloud faces challenges such as intense competition from domestic players like Huawei and Tencent, as well as global giants like AWS and Azure. Additionally, the company is offering cloud services at discounted prices to attract customers, which could impact margins.
Oracle Cloud Infrastructure
While OCI holds significantly less market share than the top 3 hyperscalers, its multicloud strategy of partnering with Microsoft Azure and Google Cloud enables customers to run Oracle Database services across different cloud platforms with low latency and no data transfer fees. This is instrumental to their growth, as so many enterprises are seeking out multicloud approaches today. Overall, Oracle Cloud Infrastructure is well-positioned for continued growth in 2025, driven by its strategic focus on AI, sustainability, and customer flexibility, with strong financial performance and expansion plans.
Smaller Niche Providers
Some noteworthy smaller regional cloud providers include IBM Cloud, Salesforce, Tencent Cloud, and Huawei Cloud. These providers are also expanding their services with a strong emphasis on AI, infrastructure expansion, and industry-specific solutions. These platforms are all adept at serving specific and unique niches, and while they are unlikely to compete with the hyperscalers in scale and geographic reach, they nevertheless have important strengths.
They are particularly strong in regulated industries (e.g. IBM for hybrid finance/government and Salesforce for CRM), and their strategic specialization and regional dominance make them formidable players in the cloud computing space.
Neocloud Providers
WIth the growing demand for AI infrastructure, particularly for options that are less costly and more flexible and scalable than hyperscalers, a new category of cloud providers has emerged. Known as neocloud providers, these tools specialize in AI infrastructure as a service, and they focus on providing GPU-backed servers and virtual machines — often at more affordable prices.
Some examples of these providers include:
- CoreWeave – The largest and most prominent neocloud company, which went public in March 2025. Expected to double down on its data center footprint, expand GPU capacity, and offer more transparent pricing and performance for AI workloads.
- Lambda Labs – Highly popular with AI researchers, developers, and startups, due to its deep technical integration with machine learning workflows and transparent, usage-based pricing.
- Voltage Park – A nonprofit spinout with the goal of democratizing access to large-scale AI compute. Expected to make a meaningful impact in 2025, especially among academic and open-source AI communities.
- Crusoe – Distinguishes itself through its commitment to sustainability; its revenue is expected to grow significantly this year due to its partnership with Oracle in the Stargate Project.
- Cerebras – Originally a hardware company specializing in AI chips, it’s now expanded its offerings to include cloud-based AI services. Cerebras recently partnered with AlphaSense to revolutionize how enterprises access, analyze, and act on critical market data.
Stay Ahead of the Evolving Cloud Computing Landscape With AlphaSense
The cloud computing industry is evolving quickly, and staying ahead requires having access to the most relevant, differentiated insights, and ideally, before your competitors. AlphaSense is a leading provider of market intelligence, including 10,000+ high-quality content sources from more than 1,500 leading research providers — all in a single platform.
AlphaSense provides access to premium, proprietary, public, and private content sources, including earnings transcripts, expert call summaries, SEC filings, broker research, and industry news. And paired with our industry-leading AI search and summarization capabilities, users can instantly extract key themes, sentiment shifts, and competitive signals across hyperscalers and emerging cloud providers alike.
With advanced tools for trend tracking, market monitoring, and customizable alerts, AlphaSense empowers corporate and financial professionals to anticipate shifts in the cloud ecosystem, assess vendor strategies, and make faster, more confident investment and business decisions in a rapidly evolving sector.
Stay ahead of future cloud computing developments, and get your competitive edge with AlphaSense.
Director of Research, Tech, Media and Telecom
Michelle Brophy serves as the Director of Research, Tech, Media and Telecom at AlphaSense. Prior to joining AlphaSense, Michelle spent 3 years as the Strategist for TMT at Guidepoint Insights. Prior to this, Michelle spent 18 years on the buy side, in both portfolio manager and senior equity analyst roles, at Hilltop Park Capital and Kingdon Capital Management. Michelle resides in New York City.
Read all posts written by Michelle Brophy
