Is AWS' cloud dominance waning? New stats show the hyperscaler's IaaS market share is decreasing while Microsoft and Google record gains

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Amazon Web Services (AWS) still leads the pack in the rapidly-growing Infrastructure as a Service (IaaS) cloud market – but its lead is narrowing.

According to research from Gartner, AWS maintained its lead in the IaaS space across 2024 with a 37.7% market share and revenues of $64.8 billion.

However, analysis from the consultancy showed a poorer performance compared to the year prior, when it held 39% of the market.

While this represents a marginal decline, gains at key competitors highlight growing pressure on the hyperscaler. Microsoft, for example, saw its market share rise from 23% to 23.9% while Google's increased from 8.2% to 9%.

Elsewhere, market share at Alibaba and Huawei also dipped across the year, Gartner found.

“Cloud providers are investing heavily in AI infrastructure and capabilities to become leaders in the rapidly evolving AI-optimized IaaS market," said Hardeep Singh, principal analyst at Gartner.

"They expect that AI will become a much larger revenue contributor in the future, even though it currently remains a relatively small slice of their overall revenue within the IaaS space."

Overall, the worldwide infrastructure as a service (IaaS) market grew 22.5% in 2024, reaching $171.8 billion.

This growth, Gartner noted, is driven by a demand for flexibility with data residency and sovereignty, as enterprises seek to gradually transition to the cloud while keeping control over their data and operations.

"As enterprises continue to seek greater flexibility, improved resilience and optimized performance, there is sustained demand for cloud migration and modernization services," Singh added.

"Enterprises want to transform their IT infrastructure by leveraging multiple platforms for AI and prioritizing modernization by migrating existing workloads to the cloud. They are also deploying cloud native applications across diverse environments.”

Meanwhile, emerging AI-optimized IaaS offerings from non-hyperscalers or GPU as a service (GPUaaS) providers are also playing a key role in addressing immediate capacity requirements by offering flexible, high-performance compute on demand.

Amazon’s cloud dominance faces big challenges

Gartner’s research isn’t the first to point to a declining state of affairs for AWS in recent months. A report from Canalys earlier this year showed sluggish growth rates for the hyperscaler, recording just 17% in the first quarter of 2025.

This not only marked a decrease compared to the 19% recorded in Q4 2024, but came in sharp contrast to growth rates of more than 30% at Microsoft and Google Cloud.

Growth is being driven by both enterprise end-users and providers, said Canalys, with leading hyperscalers ramping up their efforts to optimize infrastructure to accommodate AI adoption.

Amazon is also facing increased pressure in the UK alongside Microsoft over its market dominance.

After a three-year investigation, the UK's Competition and Markets Authority (CMA) issued a report late last month concluding that the two companies have "significant unilateral market power" in the UK's cloud infrastructure services market.

Combined, the two cloud computing giants command a 70% market share, dominating in both the IaaS and PaaS domains, the CMA found.

The competition watchdog recommended that both companies be assessed for Strategic Market Status (SMS), which could lead to targeted interventions to encourage greater competition.

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Emma Woollacott is a freelance journalist writing for publications including the BBC, Private Eye, Forbes, Raconteur and specialist technology titles.