Cloud Infrastructure Spending Continued to Accelerate in 4Q24

Spending on compute and storage infrastructure products for cloud deployments, including dedicated and shared IT environments, increased 99.3% year-over-year in the fourth quarter of 2024 to $67 billion, according to IDC. Spending on cloud infrastructure continues to outgrow the non-cloud segment, with the latter growing by 25.8% in 4Q24 to $22.0 billion. The cloud infrastructure segment experienced double-digit growth unit demand of 33.5%, with a continued increase in ASPs mostly related to the accelerated increase of GPU server shipments.

“Cloud infrastructure spending growth continued outpacing market expectations again in the fourth quarter,” said Juan Pablo Seminara, director for IDC's Worldwide Enterprise Infrastructure Trackers. “Even after raising some doubts about the necessity of large investments in AI infrastructure exposed by DeepSeek’s R1 initial impact that later proven been not that accurate, the industry is also understanding that the evolution from simple chatbots to reasoning models to agentic AI will require several orders of magnitude more processing capacity, especially for inferencing. So even by gaining efficiency on investment costs, IDC expects cloud infrastructure market growth of 17.8% CAGR for the following five years.”

Spending on shared cloud infrastructure reached $57 billion in 4Q24, increasing 124.4% compared to a year ago. The shared cloud infrastructure category continues capturing the largest share of spending compared to dedicated deployments and non-cloud spending, in 4Q24 shared cloud accounted for 64% of the total infrastructure spending. The dedicated cloud infrastructure segment grew 21.8% year-over-year in 4Q24 to $10 billion.

For 2025, IDC is forecasting cloud infrastructure spending to grow 33.3% compared to 2024 to $271.5 billion. Non-cloud infrastructure is expected to decline by 4.9% to $68.1 billion. Shared cloud infrastructure is expected to grow 25.7% to $213.7 billion for the full year, and spending on dedicated cloud infrastructure is expected to grow further in 2025, with 71.8% to $57.8 billion for the full year. Additionally, the cloud infrastructure GPU-based accelerated market will show a 46.8% growth in 2025, reaching $157.8 billion value as AI infrastructure investments still count with an important backlog as well as future projects in the cloud.

In 4Q24, service providers as a group spent $65.6 billion on compute and storage infrastructure, up 103.9% from the prior year. This spending accounted for 73.8% of the total market. Non-service providers (e.g., enterprises, government, etc.) also increased their spending to $23.3 billion growing 23.5% year over year. IDC expects compute and storage spending by service providers to reach $262.1 billion in 2025, growing at 30.9% year-over-year.

On a geographic basis, year-over-year spending on cloud infrastructure in 4Q24 showed very positive results across all regions where the fastest growing regions were Canada and the USA showing triple-digit growth of 151.8% and 125.3% respectively, regions with double-digit growth were China, Japan, APeJC, Western Europe, Middle East & Africa and Latin America with 99.6%, 76.2%, 48.0%, 36.8%, 28.1%, and 14.3% respectively. While Central & Eastern Europe was the only region showing one-digit growth at 5.6%.

In the long term, IDC predicts spending on cloud infrastructure to have a compound annual growth rate (CAGR) of 17.8% over the 2024-2029 forecast period, reaching $461.9 billion in 2029 and accounting for 83.0% of total compute and storage infrastructure spending. Shared cloud infrastructure spending will account for 80.5% of the total cloud spending in 2029, growing at a 16.9% CAGR and reaching $371.7 billion. Spending on dedicated cloud infrastructure will grow at a CAGR of 21.8% to $90.3 billion by 2029. Spending on non-cloud infrastructure will also rebound with a 5.7% CAGR, reaching $94.4 billion in 2029. Spending by service providers on compute and storage infrastructure is expected to grow at a 17.5% CAGR, reaching $448.0 billion in 2029.