Google bets on AI to rival Microsoft, Amazon’s cloud dominance in India

This growing demand underpins Google’s decision to make its biggest bet in the country, announcing last month that it would invest $15 billion to build a 1 gigawatt (GW) data center in Andhra Pradesh.

“We’re seeing very strong demand growth for Google Cloud, and that’s reflected in the publicly available data. We’re seeing our overall growth rates increase over the last three quarters,” said Matt Renner, head of global revenue for Google Cloud. “We’re growing as a company, but we’re growing faster. It’s not necessarily happening at the same pace as our competitors. It’s because AI is changing the conversations customers are having about hyperscalers, which is about the skills they have at Amazon and Microsoft.”

“Simply put, Google can do everything its competitors can do, but they can’t do everything we can do,” Renner added.

India still accounts for a very small portion of the global cloud computing and data center services market. Data center spending by Indian businesses is expected to reach $4.8 billion by the end of 2025, data released by consultancy firm Gartner on July 15 said; this is a paltry 1% of the $475 billion global data center spend. India is expected to spend $160 billion on public cloud services this year; this is 3% of the $5.4 trillion spent globally.

However, Renner vouched for India’s strategic importance for Google. “The $15 billion investment is testament to our ongoing material investments in India. This is because of the demand we are already seeing and the demand we expect from India. There is a lot of focus from Indian companies as well as consumers when it comes to AI. We see a very broad, diverse demand focused on India and we are trying to meet this with infrastructure,” he said.

Check out India cake

In India, Google lags far behind Amazon and Microsoft’s cloud offerings. Google won, according to the latest available data ₹1,963 crore from cloud services in India in FY24, compared to Amazon Web Services (AWS) earnings ₹14,446 crore this fiscal. Microsoft, which does not separate its Azure revenue from India, reported the following: ₹16,531 crore revenue from services as of March 2024.

Since then, Google has made a massive AI push to catch up with rivals like OpenAI in AI applications and platforms. Google and Microsoft are yet to submit their FY25 earnings to India’s corporate affairs ministry. AWS reported a 16% increase in cloud revenue from India. ₹16,789 crore for the financial year ending March 2025.

Over the last two years, India has emerged as a strategically important market for the industry. A stable geopolitical environment, combined with the government’s push to position the country as a global hub for cloud and data services, has pushed companies to invest locally. The three Big Tech companies mentioned above have announced nearly $25 billion worth of investments this calendar year alone.

There is now a race between Amazon, Google and Microsoft to grab a bigger share of India’s emerging cloud pie.

“The real debate is who is the best partner for AI over the long term, and we’re in a unique position there. This also opens up the opportunity to displace our competitors going forward when it comes to standard hyperscaler services, which are now secondary and AI is the primary offering. We’re seeing healthy growth in our core business, but we’re seeing explosive growth in our AI business, and both are interconnected,” Renner said. he said.

“The cloud has reached critical mass, but the conversation among Indian companies now revolves entirely around AI and the potential it offers,” said Sashikumar Sreedharan, managing director of Google Cloud in India. He gave examples of Reliance Jio and Tata Consultancy Services as enterprise customers using Google as their primary AI cloud provider.

It’s not easy to catch

Moving forward won’t be that easy for Google, industry experts said.

Agreements signed by cloud platforms are often long-term because it is expensive for businesses to move their data, applications and other services from one cloud platform to another.

A senior executive at one of Google’s two biggest rivals mentioned above, requesting anonymity, said that since Google’s AI applications and platforms are also available at other cloud service providers, they do not expect long-term customers to suddenly switch to a competing platform because switching between different cloud services is complex and involves various contractual terms and conditions.

Some other industry stakeholders also said it would be difficult to translate Google’s AI push into enterprise cloud deals.

“Supply patterns still favor incumbents,” said Sanchit Vir Gogia, CEO of technology consultancy Greyhound Research. “Azure is too established to be easily displaced across enterprise IT stacks, especially when integrated into daily workflows through AI, Office 365 and Dynamics.” “Meanwhile, AWS continues to hold its own with technically mature teams and compliance-focused industries that value reliability over reinvention.”

Elaborating on his company’s appeal, Himani Agrawal, Chief Operating Officer, Microsoft India and South Asia, said: “From banking and healthcare to media, government and manufacturing, organizations choose Microsoft for secure, scalable and responsible AI innovation on Azure. 90 of the top 100 NSE companies are now on Azure, underlining our leadership in strengthening the digital core of the country.”

An email sent to Amazon Web Services did not receive a response by publication time.

Summarizing Google’s progress, Greyhound’s Gogia said: “For now, Google is winning add-on workloads, not entire cloud properties. A specialist is being brought in as an AI sidekick, rather than the primary driver. This may change over time, but for now Google’s growth reflects experimentation, not separation. Gemini and the broader Vertex ecosystem are perfectly suited for greenfield AI projects, not legacy system overhauls.”

Jayanth Kolla, partner at technology consulting firm Convergence Catalyst, also contributes to this claim. “Many companies are switching between cloud platforms to avoid being tied to complex contract terms from Big Tech providers. But Google has generally not been very successful in offering a differentiated cloud platform compared to its competitors. Whether it can do that with AI this time is what could determine whether it can win cloud deals from its rivals.”

For perspective, data from the three companies’ most recent quarterly financial statements showed that Google’s global cloud business grew 12% sequentially in the September quarter, reaching $15.2 billion. AWS continues to be the world leader in cloud services, increasing its revenue by 7% sequentially to $33 billion, while Microsoft came in a close second, increasing by 3% sequentially to $30.9 billion.