New figures from Synergy Research Group suggest the cloud infrastructure market is accelerating faster than at any point in recent years, with Q1 enterprise spending reaching levels that translate to an annual revenue run rate above half a trillion dollars.
The update points to both continued mainstream cloud demand and a changing competitive landscape as GenAI reshapes workloads and purchasing patterns.
Synergy estimates that Q1 enterprise spending on cloud infrastructure services rose by more than $35 billion compared with the first quarter of the previous year, landing at $129 billion. On an annualised basis, this equates to a run rate of over $500 billion. The most notable element of the dataset is that the year-on-year growth rate increased for the ninth consecutive quarter, reaching 35%—the highest growth rate seen since the last quarter of 2021, when the market was still around 40% of its current size.
The report also attributes key market shifts to GenAI. While Amazon remains the clear leader among major cloud providers, Synergy says Microsoft and Google are growing at substantially higher rates. In terms of Q1 worldwide market shares, Synergy lists 28% for Amazon, 21% for Microsoft, and 14% for Google.
It adds that several “tier two” providers are showing particularly strong momentum, naming CoreWeave, OpenAI, Oracle, Crusoe, Nebius, Anthropic and ByteDance.
Beyond the hyperscalers, Synergy notes that the competitive map now includes five “neocloud” companies among the top thirty cloud providers, reflecting how AI-focused compute demand is feeding new business models. The company’s estimate places the contribution of neoclouds at 5% of the total cloud market, with an even larger share in AI-focused segments.
Looking at overall revenue, Synergy estimates quarterly cloud infrastructure service revenues—covering IaaS, PaaS and hosted private cloud services—at $128.6 billion, with trailing twelve-month revenues of $455 billion. Public IaaS and PaaS services account for most of the market and grew by 38% in Q1, while leadership is pronounced in public cloud, where the top three providers command 67% of the market.
Geographically, growth remains broad. Synergy says that in local-currency terms, countries including India, Indonesia, Ireland, Taiwan, Thailand and Malaysia all outpaced the worldwide average. The US remains the largest market, growing by 37% in Q1, while Europe’s strongest growth was seen in Ireland, Norway and Poland.
John Dinsdale, Cchief analyst at Synergy Research Group, said: “The Q1 market is now fifteen times larger than it was a decade ago and continues to expand at 35% annually. Reaching a half-trillion-dollar run rate underscores the far-reaching impact of cloud computing and AI on the IT landscape.”
