Hyperscale giants like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) are riding an artificial intelligence (AI)-fueled cloud spending splurge that is set to hit record levels of growth next year.

A new report from research firm Canalys found that global spend on cloud infrastructure increased 21% year over year during the third quarter, hitting $82 billion in total investments. AWS, Microsoft, and Google combined grabbed 64% of that total spend, which Canalys noted was consistent with the previous year.

However, Microsoft and Google both posted growth numbers that outpaced market heavyweight AWS. Microsoft witnessed its level of cloud revenues increase by one-third during Q3, while Google’s revenues increased by 36%, both handily outpacing the 19% cloud-related revenue growth reported by AWS.

But don’t cry for AWS as its overall dominant market share resulted in a larger monetary increase in actual dollar terms during the quarter.

Canalys’ numbers echo other reports that showed robust cloud spending during Q3, with the big players garnering a vast majority of those revenues. And like those other reports, Canalys noted a strong AI angle that is pushing those hyperscalers to carefully manage their own increased infrastructure investments.

“Continued substantial expenditure will present new challenges, requiring cloud vendors to carefully balance their investments in AI with the cost discipline needed to fund these initiatives,” Canalys Senior Director Rachel Brindley wrote. “While companies should invest sufficiently in AI to capitalize on technological growth, they must also exercise caution to avoid overspending or inefficient resource allocation. Ensuring the sustainability of these investments over time will be vital to maintaining long-term financial health and competitive advantage.”

A recent Synergy Research Group (SRG) report noted AWS, Microsoft, and GCP were in the midst of a data center expansion spree that will see them control nearly two-thirds of all data center capacity worldwide by the end of this decade, which is eight-times the capacity they controlled in 2017.

ABI Research noted in a report that this AI-fueled investment spree will also angle toward “large and mega-sized colocation facilities.” The firm noted that 28% of total worldwide data centers currently fit this size definition, but that “number will grow to 43% by 2030 as companies build larger data centers that can accommodate AI/generative AI workloads and other data-hungry applications.”

The hyperscalers have discussed that investment balance.

“We are – and we’ve talked about now for quite a few quarters – we are constrained on AI capacity,” Microsoft CFO Amy Hood said during Microsoft’s Q2 earnings call. “And because of that … we’ve … signed up with third parties to help us as we are behind with some leases on AI capacity. We’ve done that with partners who are happy to help us extend the Azure platform, to be able to serve this Azure AI demand. And you do see us investing quite a bit as we’ve talked about in builds so that we can get back in a more balanced place.”

AWS CEO Andy Jassy during the company’s Q3 earnings call said its data center investment plans include having to work through logistical challenges.

“If you think about, we have 35 or so regions around the world, which is an area of the world where we have multiple data centers, and then probably about 130 availability zone through data centers, and then we have thousands of SKUs we have to land in all those facilities,” Jassy said. “And if you land too little of them, you end up with shortages, which end up in outages for customers. So most don’t end up with too little, they end up with too much. And if you end up with too much, the economics are woefully inefficient.”

Cloud growth set to surge in 2025 That delicate balance is set to continue into the new year as analysts expect cloud need and spending to surge.

Gartner forecasts that full-year public cloud spending will increase 19.2% in 2024, surpassing more than $595 billion, and then climb a segment record 21.5% for full-year 2025, topping more than $723 billion in total spend.

“The use of AI technologies in IT and business operations is unabatedly accelerating the role of cloud computing in supporting business operations and outcomes,” Sid Nag, VP Analyst at Gartner, wrote. “Cloud use cases continue to expand with increasing focus on distributed, hybrid, cloud-native, and multicloud environments supported by a cross-cloud framework, making the public cloud services market achieve a 21.5% growth in 2025.”

Gartner also predicts that 90% of organizations will adopt hybrid cloud through 2027, which will challenge their ability to link surging genAI data sources across those hybrid environments.