This is a good analysis by Matt Rickard on why the incumbent large cloud providers (AWS, Azure, GCP) will not follow the telcos to become “dumb pipes” for compute and storage.
He presents a number of arguments why the hyperscalers will continue to provide high value services. The most compelling one is that the incentives are aligned between open source and the hyperscalers. These companies can capture much of the value of open source by value added offerings. This, in turn, allows them to fund the further development of the underlying open source project or their own forks.
That, combined with the political muscle these very large companies have, will ensure that they keep their business models and margins alive for the forseeable future.