Microsoft vs Hyperscalers: Cloud Market Share and AI Growth Comparison

The cloud market represents $99B in quarterly revenue across the top three providers. Here’s how Microsoft stacks up against AWS and Google in the AI era.

Cloud Market Share (Q2 2025)

Key insight: Azure growing 2X+ faster than AWS

Growth Rate Comparison

Azure’s 39% growth significantly outpaces both AWS (~19%) and positions Microsoft as the fastest-growing major cloud provider. AI services contribute 13 percentage points of that growth.

AI Differentiation by Provider

Microsoft Azure

• Model Access: OpenAI GPT-4/5, Claude 4.5, Llama, Mistral (11K+ models)
• Enterprise Integration: M365 Copilot, Dynamics, GitHub
• Unique Asset: Work IQ (M365 enterprise data)
• Distribution: 80% of F500 use Azure AI Foundry

Amazon AWS

• Model Access: Bedrock (Anthropic, Meta, Mistral)
• Custom Silicon: Trainium, Inferentia
• Unique Asset: Scale, enterprise relationships
• New: $38B OpenAI deal

Google Cloud

• Model Access: Gemini 2.0 (proprietary)
• Custom Silicon: TPUs (3-5 years ahead)
• Unique Asset: Full vertical integration, no partner dependency
• Advantage: Own the entire stack

Microsoft’s Competitive Position

Strengths

• ✓ Distribution: 80% F500 use Foundry
• ✓ Work IQ: M365 enterprise knowledge moat
• ✓ Integration: Full stack coherence
• ✓ Capital: Self-funding $120B+ CapEx

Gaps

• ✗ Custom silicon 3-5 years behind TPU
• ✗ Consumer Copilot underperforms
• ✗ OpenAI dependency risk
• ✗ Margin pressure from AI infra

The Microsoft Moat

“Microsoft’s advantage is integration, not leadership at any single layer.”

No competitor can match Microsoft’s distribution reach into the enterprise. That’s the moat — not model superiority or silicon leadership.

The Verdict

Microsoft wins on distribution and integration — not on any single layer of the AI stack. AWS has scale, Google has technology, but Microsoft has the enterprise relationship.

For the complete strategic analysis, read Microsoft In The AI Stack on The Business Engineer.