Microsoft's Cloud AI Engagement Outperforms That of Amazon and Google

Cloud behemoths like Google Cloud Platform (GCP), Microsoft Azure, and Amazon Web Services (AWS) are placing large bets on artificial intelligence (AI) as the next big thing in cloud computing. AWS and Google are lagging behind Microsoft in cloud AI engagements, especially in generative AI (genAI), according to a recent research from IoT Analytics.

In AI Case Studies, Microsoft Takes the Lead

Microsoft accounted for 45% of all new cloud AI case studies, including a resounding 62% of case studies with a genAI focus, according to IoT Analytics' research. According to the paper, Microsoft's alliance with OpenAI has strengthened its dominance in this market.

In contrast, Amazon Web Services is thriving in conventional AI use cases. The platform's power in legacy AI systems was demonstrated by the fact that, although it only made up 15% of new cloud AI case studies, 85% of them concentrated on non-genAI applications.

Google Cloud integrates AI more successfully across its cloud wins, but its volume lags. Cloud AI is used in 36% of Google's recent public cloud case studies, indicating that AI is a bigger factor for Google Cloud than its competitors.

The Cloud AI Engagement of Hyperscalers

In comparison to their market shares, IoT Analytics discovered that Google and Microsoft are over-indexing in cloud AI engagement:

• Microsoft's AI involvement was at 45%, which was 16 percentage points higher than its entire cloud market share of 29%.
• With a 17 percent engagement rate, Google outperformed its 9 percent market share by eight points.
• Three percentage points less than its 37 percent market share, AWS AI engagement was at 34 percent.
• AWS trailed by 21 percentage points in comparison to its leadership in the larger cloud industry, while Microsoft's engagement rate in genAI specifically twice its total market share.

Demand for AI Fueling Investment in Cloud Infrastructure

Hyperscalers are investing heavily in infrastructure due to the rising demand for AI. In 2024, Amazon intends to invest $75 billion in capital projects to support AWS and its artificial intelligence offerings. In a similar vein, in response to the growing demand for AI workloads, Google and Microsoft have increased their investments in data center expansions with an AI focus.

Synergy Research Group reports that investments in AI and genAI accounted for a major portion of the $84 billion in global enterprise cloud infrastructure spending in Q3 2024, a 23 percent year-over-year increase.

Large and mega-sized colocation facilities will be the main focus of the AI-driven cloud infrastructure expansion, claims ABI Research. As businesses construct facilities that can handle AI and other data-intensive applications, the firm projects that by 2030, 43 percent of data centers will be large-scale, up from the current 28 percent.

Microsoft is now the hyperscaler to watch in the competition to control the AI-powered future of cloud computing, because to its sharp increase in cloud AI engagement.