Cloud

Hyperscale capex climbs as digital services drive $2.65T revenue surge

By Newsroom Apr 11, 2025 8:14am
Synergy Research Group Google Cloud Microsoft Azure AWS
  • Hyperscale operators experienced significant growth in 2024
  • The total revenue for these companies increased by just over 10%
  • Non-digital products and services saw a modest 1% growth

According to a recent report by Synergy Research Group, hyperscale operators experienced significant growth in 2024, driven primarily by the accelerated expansion of digital services. The total revenue for these companies increased by just over 10%, reaching $2.65 trillion. Notably, revenues from digital services grew by 13%, while non-digital products and services saw a modest 1% growth.

Key growth areas in digital services:

  • Cloud Computing: Experienced a 23% increase
  • Social Networking: Grew by 20%.
  • Software-as-a-Service (SaaS): Saw an 18% rise

Within the cloud segment, generative AI platform services and GPU-as-a-Service (GPUaaS) more than doubled in size during 2024, highlighting the increasing demand for AI-driven solutions, noted the report.

"Some have been stunned by the scale and growth of hyperscale company capex. The numbers are indeed huge, but when they are put into the right context, they become more understandable and reasonable," said John Dinsdale, chief analyst and research director at Synergy Research Group, in an email.
 

Related

Telecom capex to decline at 2% CAGR through 2027, says Dell’Oro Group
 
"Leading the charge, cloud and social networking grew by 20% or more, and SaaS wasn’t far behind. Breaking it down further, GenAI-specific cloud services grew by well over 100%," he wrote. "In aggregate across all hyperscale companies, the capex to revenue ratio was a tad over 12% in 2024, up from previous years but still eminently reasonable for infrastructure-oriented industries. Of course, some individual companies had a ratio well in excess of 12%, but overall, given the scale and growth of revenues, this picture does not show an extravagant level of spending."

Leading hyperscale companies by total revenue:

  • Amazon
  • Apple
  • Google
  • Microsoft
  • Meta
  • JD.com
  • ByteDance
  • Alibaba

Companies with the highest growth rates in 2024 included CoreWeave, ByteDance, Meta, Microsoft, Google and Amazon.

Synergy Research Group 2025 hyperscale_revenue chart

To support this expansion, hyperscale operators have been increasing their capital expenditures (capex). Historically, the capex-to-revenue ratio for these companies was under 10%, but in 2024, it rose to just over 12%. This trend is expected to continue, with substantial investments planned for 2025 to meet the growing demand for digital services.

Related

Google wants to make its 2M-mile fiber network fully autonomous by year’s end

Currently, there are 1,149 hyperscale data centers in operation worldwide, reflecting the infrastructure growth necessary to support expanding digital services. 

Ed. Note: This article was written with the help of GenAI.

Synergy Research Group Google Cloud Microsoft Azure AWS Modernization Newswire Cloud